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.
We have looked at fund flows now that CFTC data on positioning remains unavailable due to a data-issue. Bond speculation is getting short again, while investors are not buying the rebounds in the USD and Tech/Discretionary stocks
The Chinese reopening has possibly been the most covered topic since its announcement in late 2022 – at least in financial circles. The awaited lifebuoy for the global economy, which the reopening consensually was thought to be, has yet to truly show up in prices of commodities essential in manufacturing. We prefer to stay long Industrial Metals (mainly Copper) relative to Energy.
ONE WEEK until “The Most Important Election of the Year”. Young disenfranchised Nigerians hope that outsider, Peter Obi, can shake-up a Nigerian democratic system in decline. Will he win, and what would that mean for Africa’s most populous country?
Midweek has arrived and that calls for a rundown of the five things we watch the closest. As is the custom every Wednesday, we will take you through these most important themes (and charts) in macro and summarize how we interpret them. Dig in!
Japan is a MUST watch as a risk taker in the West as the potential scrapping of the YCC policy holds true time bomb potential for Western markets. Here is what is currently priced in and how to position for it.
Is Russia back in the driver’s seat after the supply cut announced late last week? If China adds demand, while Russia cuts supply, it may be a bullish cocktail for energy.. But so far the truly bullish price action remains to be seen.
As the tides have turned on global liquidity (at least for now), we decided to look at equity risk premia in a historical context. Do you get adequate compensation for equity risk? Probably not.
With the recent almost farcical economic data coming out of the US, we bet economists and traders are on the edge of their seats awaiting the coming CPI-print. In this ‘preview’ we’ll turn to our charts trying to align expectations to select indicators.
Tuesday’s State of the Union address gave little cause for optimism that a looming debt crisis in the U.S. can be avoided. Speaker Kevin McCarthy, seemed as powerless as the day he was elected and Biden certainly didn’t make his life any easier.
Every Wednesday our Head of Research, Andreas Steno, goes through the 5 most important themes/charts in global macro right now and how we assess them. Enjoy!
Bearish inventories across both oil and natural gas and waiting for the Chinese reopening to show up! Here is the latest “Energy Cable” update on Natural Gas, Oil – and the overall energy complex with price signals and model based predictions. The only publication to cover this sector across geographies and asset classes. Enjoy!
Our macro regime indicator is based on liquidity, inflation and growth, which are the three most important tactical asset allocation variables. Here is how we have built the framework and what to expect from it in the coming months.
What to do when COT-data is delayed? Here is a ‘special edition’ of our weekly ‘Positioning Watch’ covering recent fund flows in major ETFs in various asset classes. How do people really feel about the latest movements in markets not least given the absurd economic data released this week?
Norges Bank is once again caught behind the curve in its FX management policy due to the landslide in Natural Gas prices. Unless Norges Bank immediately stops selling as many NOKs per day, the NOK selling pressure is likely going to continue.
Last Sunday we looked at USD liquidity and its impact on markets. We determined that the drawdown of the TGA due to the debt ceiling was a short term boost to liquidity but also flagged a prolonged QT risk in the second half of the year using the Waller-rule. In this Watch-series we would like to look at the other side of the valuation coin and put EPS under the recession spotlight.
This year’s edition of WEF’s flagship survey named India the favorite among top CEOs to be the fastest growing and inflationary stable economy in 2023. But so far, the Davos-darling has struggled to live up to the hype: Goldman Sachs has slashed India’s expected GDP growth for FY ‘23 from 6.9% to 5.9%. Is India still a good investment case? In this article we take inventory of the country’s growth prospects short- and medium term.
Every Wednesday our Head of Research, Andreas Steno, goes through the 5 most important themes/charts in global macro right now and how we assess them. Enjoy!
Is the Chinese reopening a true game-changer and how will the attacks in Iran over the weekend alter the geopolitical risk picture for energy markets? We provide our takes alongside updated price signals on oil and natural gas. “We are happy when people/things conform and unhappy when they don’t. People and events don’t disappoint us, our models of reality do. It is my model of reality that determines my happiness or disappointments.” – Stefan Zweig 3Fourteen Research: The true story on the Chinese reopening The China reopening story has fueled oil’s 2023 rise. Read the last sentence carefully. I specifically said the China reopening “story.” Said differently, it has not been the reopening of China that has propelled oil to this point. Rather, it has been the “story” of the reopening. Three weeks ago, we dug into oil’s physical market. Back then, we argued that oil could not divorce from its physical reality for very long. With that said, over short time horizons, oil regularly divorces from the physical market. Ultimately, to make an educated guess of where oil is going, you must understand both the physical and paper markets. Today, we take a look at the paper market and how we incorporate it into the 3Fourteen Core Crude Oil Model. At present, the Model remains Neutral (components below). The physical and technical components are bullish. The inventory component is bearish. And, the positioning (i.e. paper or futures) component is neutral. We account for the paper market in the “Positioning” […]
Ahead of each FOMC meeting we take the temperature of the US economy via a pamphlet of forward-looking indicators on inflation, growth, liquidity and asset markets. Are conditions supporting a pause-narrative?
We look into how traders are positioned every Saturday to assess whether we are leaning with or against the wind. Is this a new bull run or just another bear market rally? Let’s have a look at the numbers
We now officially have POSITIVE real Fed Funds rates in the US, while we remain on inflation watch in Spain on Monday. European inflation is falling apart as well.
How closely tied is the USD outlook to the liquidity outlook and what does it mean for the USD barometer going forward?
European equities have seen an incredible start to 2023 on top of strong performance in late 2022. But European manufacturing and tech finds itself under pressure from massive public investments in both the US and China. What to make of the EU’s response and how is the outlook for Europe?
Every Wednesday our Head of Research, Andreas Steno, goes through the 5 most important themes/charts in global macro right now and how we assess them. Enjoy!
Last week we released our first edition of the ‘Dollar O’ Meter’ which sat out to probe the USD and its relative strength (or weakness). Without giving too much away, we find conviction that further weakness in the USD is up ahead in the next few months. If we are correct, how should one then position for such a circumstance?
Natural Gas has dropped further in price since New Years, just as our models rightfully told us to expect. Now, the pendulum is starting to swing in the other direction according to our models for oil and gas.
Saturday is here, and we hope that you all have a great weekend. Meanwhile, Saturday also means fresh CFTC COT data, so while we endorse you to kick up your feet, we’ll present to you our updated dashboards on positioning across asset classes and highlight the peculiarities that catch our eyes.
The importance of the dollar and its influence on almost any given asset will come to nobody’s surprise, especially after its tear in 2022, which was like a wrecking ball, wreaking havoc in and around the financial system. Therefore we are launching the Dollar O’ Meter to track the USD versus peers.
Lagarde is CRYSTAL clear in her communication still and she even provides trading advice. Watch Kuroda-san today. He may have a farewell message up his sleeve for us.
The Globalization Elite is convening at Davos this week.. We see a lot of insight in two words rolling down from the Alps – “polycrisis” and “friendshoring”