China is rebounding from a Lehman like credit event in 2022, which makes Chinese assets the cheapest on earth. Buying Chinese assets or assets outside of China with a link to China may prove to be your portfolio liberator in an otherwise tricky road ahead in 2023.
For years, the US have struggled to find their footing vis-a-vis the new Chinese threat. We have seen countless attempts at “strategic pivots” and contructive meetings, but it’s no wonder if the Chinese are left with a feeling of confusion. What do the US actually want? What will be the next steps in Bidens “de-coupling” from China?
The abiding tale of a Chinese reopening has been about as labile as pundits’ conviction of a soft landing. In fact the two may very well be tightly correlated. Now, it seems data has finally arrived to firmly lay to rest the debate whether a reopening would show. What better time then to unwrap and examine the implications?
China’s top legislature, the National People’s Congress (NPC), opened its annual meeting yesterday. The main highlight was the presentation of the new work report by outgoing Premier Li Keqiang which sets the 2023 fiscal targets for the Chinese economy. Later this week, Xi Jinping is expected to further consolidate his power with several high-profile appointments including the new Premier, vice-premiers, and the new governor of the central bank.
The Chinese politburo aims for 5% annual growth in 2023. This leaves room for an upside surprise from China for once. We have a big week ahead of us. Find our expectations here.
There are undoubtedly signs of inflation pressures resurfacing in leading indicators, but remember that activity leads inflation. If inflation returns (from a momentum perspective), it is because activity has picked up markedly ahead of it. That is not bad news.
The ISM Manufacturing was the worst possible cocktail on the surface but remember the time-lags from the survey to actual activity. Inflation is likely to rebound later in the year, but not for now.
The Chinese manufacturing sector rebounded in February and the composite PMI is booming, which will be a new booster for China sensitive equities and commodities. Rates will likely continue up alongside it.
Greetings from Copenhagen everybody! It is Tuesday and that means another energy cable. Inventories are building, while jet fuel demand remains subdued compared to projections. In this update from 3Fourteen and Steno Research we take you through everything you need to know about current energy market trends and how to trade them.
What on Earth is China up to? We hear reports of them selling weapons to Russia and now top diplomat Wang Yi is touring Europe with a peace plan. Does he bring Wish.com weapons with him? Here’s our analysis!
China actively uses its reserves to fight price trends and currently BOTH the US and China release reserves simultaneously. This is more than enough to counter Russian production cuts. Here is why!
PBoC injected almost “war-like” liquidity on Friday. Is this another sign of Chinese authorities really trying to pump liquidity into the system? This week we watch RBNZ, PCE prices and Japanese inflation.
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.
We have been spending countless hours discussing the liquidity outlook in the US, but developments elsewhere are equally as interesting. JPY and CNY liquidity is on the RISE, which has turned the tide on “global liquidity”. Position accordingly?
Chinese inflation is re-increasing, which rhymes with our APAC inflation story for H1-2023. The question is just how strong the Chinese momentum really is.
The market is doing exactly what it should do, if US/Western inflation is falling and China is fueling the global economic growth momentum again. The question is whether it is sustainable to bet on that cocktail. We doubt it.
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!
Will China attack Taiwan? What is the Davidson Window? When will it all go down? Read our take and prediction here
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!
Right about now, India surpasses China as the world’s most populous nation. Their demographics are clearly better than China’s with a much less rapidly shrinking birth rate and a better balance between the sexes. However, India is nowhere near the status of China in global affairs. What does India lack and how much will come in the coming years? We point to three areas where India need to (and will!) invest to become a truly global player: 1) Defense Industry India is the world’s largest importer of weapons. That is a testament to India’s major military build-up in recent years, but also reveals an important weakness – India can’t supply its own army, navy and air force with the hardware it needs. Modi’s grand ‘Make in India’ plan from 2014 did much to kick-start the Indian defense industry and companies such as Astra and Kamov have made great strides in recent years, India simply lacks the industrial capacity and know-how to produce the advanced weaponry needed to become a super power. To be even more to the point – India needs to be able to produce its own fighter jets, missiles and most importantly carriers and other capital ships. One gamechanger in this weakness is the Indian ship manufacturing industry. We expect that sector to undergo a major expansion in coming years due to the Western oil embargoes on Russia. India is the logical candidate to fill the void – both in terms of buying the cheap Russian oil […]
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!
China is de facto reopening by now as we rightfully forecasted a few months back, but is a reopening equal to good news straight away? Not necessarily. Here is our playbook for the Chinese reopening.
US CPI printed at 7.1% – smack dab at our forecast – but it is not necessarily a signal to buy risk assets. Margins increased when inflation was hot. The opposite will happen now.
China’s recent deals with both Iran and Saudi Arabia should be a wake-up call for the West. Xi wants to position China as both the political and economical centre of gravity for the Global South.
A rising case count is ultimately the only trigger cable to end to the Chinese zero Covid regime, why the possibility of a reopening is currently INCREASING.
Given the rumors surrounding the Chinese reopening story we thought that we would do a deep dive into the China story and look at what is moving. Can we even expect to see a reopening?
The REAL world is back. China ponders reopening, while Meta struggles. The stuff that got us into this bubble, will likely not lead us out of this bubble. Buy Industrials vs. Tech.
Developments through 2022 have exposed the interlink between macro, geopolitics and markets. We see a risk of a (semi)permanent European GDP-shock due to a lack of energy.
We have talked over and over about supply during the past 12 months, but it is now time to talk about demand. Go short the business cycle and buy USD.