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 are seeing improving fundamentals in our nowcasts and see the industrial cycle improving in both China and the US through May again. Was the sell-off in oil temporary in April? We are betting so.
US Equities have been on for a ride, but one sector in particular has been flagged by our models as being overly expensive.
High frequent data disagrees with the set-back vibes in April PMIs. Markets have started to acknowledge the improving underlying data and we see reflation being back in fashion, while not fully positioned for.
2 new positions added to our portfolio!
In addition to trading the FX market from a rebalancing of FX hedge perspective, there exists another approach that also yield consistent returns over time. This approach is highly trading-oriented and tactical in nature, as it aims to extract value from the intraday market from a mean reversion perspective.
We are back in a more positive macro environment after a weak April that we timed well in advance. The tide is turning on a couple of the major inputs in our Macro Regime model.
Our calibrated nowcasts settle on the hottest inflation forecast in town ahead of next week’s inflation report. There are increasing signs of a broadening of the re-acceleration of inflation trends, and goods may print >0% MoM for the first time in a while.
The April washout in global equities has reset the über bullish positioning in equities seen pre-April, but that leaves equity positioning more normalized right as liquidity kicks in. Time for further gains in equities? We think so.
Our PCA-tool has recently flagged SEK weakness, and with the increasing chance of a Riksbank hold tomorrow and a dovish NOK CPI report, it’s time to head out on the sidelines.
After a couple of months with continued supply chain pressures, steady trade volumes and no price action, it seems like we finally got a reaction in freight rates. Meanwhile, the Saudis are gearing up for a new oil market rally.
The overall dovish FOMC message Wednesday has laid the foundation for liquidity bets to perform over the coming weeks, as the hopes of rate cuts are back alive amidst the election year, which is rarely bad for risk assets.
Real money investors holding foreign assets must hedge their FX exposure and adjust their hedge as the value of their foreign holdings fluctuates. Our proprietary FX-hedge rebalancing model captures exactly this.
With BoJ intervening this week, moneyness in options expiring next week has exploded and will likely imply further stress in JPY pairs, while broad equity sentiment sours. Our weekly positioning overview here.
We present the ingredients needed for another potential acceleration of electricity prices in Europe over the Summer and looking at data it seems like chances are becoming greater
Loads of USD key figures and we mostly lean in a hawkish direction. This could re-fuel strong flows into the USD and paid USD rates positions. Here is why in our “the week at a glance” publication.
The recent turmoil in JPY – which turned out to be an intervention by MoF / BoJ – pushed us out of our JPY bet.
The accelerating USD vs Asian FX trends will impact markets across assets into next week. What’s cheap and what’s expensive if the CNY is getting devalued in the coming weeks?
There are signs of a mild re-acceleration of inflation trends in Europe relative to last year, which will see YoY inflation trends rising again. There are generally risks to the upside.
The full Ifo report just landed which means another quick Ifo Nugget with the most important charts from this month’s German activity numbers, which overall came in weak. Let’s dive into it.
We see reasons to bet on a reversion of the latest weakness across risk assets and have decided to buy the dip.
Option-implied probabilities derived from DEC2024 SOFR options show interesting dynamics in Fixed Income sentiment, where rates traders now almost see 0 cuts or even hikes as the most favored outcome by December this year. Read how positioning data has evolved over the last week here.
The rise in energy prices, the USD wreckingball and the higher-for-longer narrative has finally reached equities, which seems to be taking a bit of a breather here. We take a look at movements in energy and commodity markets once again.
While precious metals could provide further gains if a USDCNY devaluation comes into play, we book some profits in the turmoil.
It is tricky to time the drones flying back and forth in the Middle East, which is why we are sitting on our hands. We see an increasing latent potential in risk assets paired with higher rates when the dust settles.
Headlines in the beginning of 2024 were dominated by shipping and logistic troubles but over the last months that has almost died completely down. With “no news” we continue to see spill-overs to goods inflation in coming months.
We see a strong RV case between the Scandis!
The Norwegian rate path is likely to look dovish in June in contrast to expectations. Here is our “cheat sheet” to assess the NOK rate path daily. At the same time, NOK/SEK remains too cheap as the global reflation narrative is positive for NOK versus SEK.
Volatility was more or less muted in the beginning of the year, but the cocktail of less dovish statements from Fed officials, strong economic data and the USD wreckingball has sent volatility in the other direction. Has it moved positioning? Not really, but that doesn’t mean that it’s not important.
Despite initial succes, our long Asia bet did not turn out in our favor
The reflation will likely continue as long as Powell and his ilk keeps an implicit dovish bias intact. Energy markets will likely remain bid, but the broader commodity story seems more interesting to play than oil at these levels.