The “Watch Series” is a collection of individual series such as Europolitics Watch, Inflation Watch, Real Estate watch and much more. Stay tuned for in-depth coverage of your favourite subjects.
Will the PBoC defend the 7.30 handle at all costs? What does it mean for risk appetite? And how will Commodity markets be impacted? 5 nuggets on the importance of USDCNY right here!
We hoped for a momentary rebound yesterday but must concede to closing our RSPM exposures in the Materials space. The Chinese RE malaise hurt the momentum too much. We will consider re-entering when there is clarity around whether 7.30 holds in the line in USDCNY. Our fill levels will be updated shortly here.
View the recording of yesterday’s Q&A session
What are the options on the table for Xi? And how will Chinese assets react to different types of stimulus? We take a look at the scenarios in this piece and find that things may be improving already from a rate of change perspective.
We have used the PPI versus CPI relationship as a guiding star for our FX and rates bets across G10 and look at the PPI vs. CPI in the UK
The PBoC rate cuts are not a surprise to us as the pressures facing China are intensifying. But where does it leave monetary policy going forward?
Happy start to the week everybody, hope you have had a great weekend! Lots of things are going on in markets right now, perhaps most importantly China, so let’s dive right into that.
Tune in to hear all about Country Garden and the outlook for China
The Chinese economy is flirting with a deflationary spiral, but Xi is so far sticking to his New China Playbook where long-term economic transformation takes precedence over double-digit growth in the short-term. But as bad numbers rain down over the Chinese economy, rumours of an upcoming stimulus package intensifies.
Things are starting to look worse for China just as everyone started to sense that a rebound might have been on the menu. Real estate is turning outright bearish as we speak, but will China continue to be the West’s manufacturing hub?
Which assets will be on the move if the Chinese RE meltdown continues on Monday? We have gathered the empirical evidence in this short but data-heavy piece. Best of luck for trading during the week ahead!
CPI is cooling with economic data still suggesting that we are in a Goldilocks scenario. But are markets claiming their victory too early? And will unusual optimism be the catalyst for a recession?
A relatively strong week this one despite Xi keeps hunting us. The boomer trade has been doing bits along with the curve steepener. But we will probably be making changes soon. Read below for context
This week has been all about the yield curve and a potential steepener here at Steno Research. We’ll end the week on a short note for those seeking alternative ways of playing the steepener.
CPI numbers, here we go! CPI came in at pretty much consensus on all parameters so no surprise there. However, we wouldn’t want to rob you of the chance at some quick deep dives into the numbers.
Is the EUR resilience basically just down to a continued decline in local energy costs? Natural Gas prices have explained almost the entire volatility in the EUR since 2021 and with the tide starting to turn in energy space, it may be time to watch out in FX space as well. Here is the data!
As highlighted in our data dive yesterday on the curve we see the steepener case as increasingly compelling. From our portfolio, you will also know that we have been moving towards a boomer composition and in the following short note we’ll try to support that thesis.
In this short note we go through why EU inflation is likely to get back to target faster than US inflation due to technical differences in the way of measuring inflation.
The stars align. US and Chinese inventories are under pressure. The Saudis are getting the upper hand on speculators. Is this the typical late-cyclical final bounce in oil?
We launch our Yield Curve watch series with an editorial of the prospects for the curve. Is steepening on the cards? And is bull- or bear steepening most likely from here? Here is the data!
Here is our chart-deck on the US CPI report on Thursday. A soft core paired with a hotter headline? It looks like an odd- and rare steepener cocktail to us.
Bear-steepening paired with cuts left BRL vulnerable
A lot of volatility and plenty of aspects to digest after a red week in markets. But how have positioning and sentiment moved? Read here to for our view
We close to trades in the money here at US market open
The steepening of the USD curve is the overarching market driver and we have thankfully partially rotated our portfolio in the right direction ahead of the move. How do you trade a steeper yield curve across assets? Our weekly portfolio update is out!
All recession calls have been mistimed so far but I think the end is near for our booming economy and that the “real economy” will be the first domino before the financial system despite the obvious issues within it
It seems like curve steepening is now on the cards. Is this the typical “actual recession” signal or is it driven by fundamentals in supply?
An interesting gap is emerging between GDP and GDI, which in theory should be 2 conceptually equal measures of domestic output. Who’s right and who’s wrong? And where does this place us in the business cycle?
How on earth can the JPY weaken when 10yr JPY yields are on the rise? We look at flows and investment mandates and how they impact the JPY and JGBs. We still see 150+ on the horizon for USDJPY.
Price action in oil is confirmed by spreads, positioning and demand fundamentals. Meanwhile, the European natural gas case remains boring despite a few volatile hiccups in recent months. Find out why here!