As per usual ahead of a CPI report, we deliver the best charts on the USD inflation outlook. With May inflation coming in low across the globe, we see clear downside risks to the inflation report consensus.
A big central bank week ahead – what’s priced in and have central banks been surprised on the up- or downside to projections on inflation? Let’s have a look!
The USD is on the move and as per usual, repercussions are felt across the financial markets. Disinflation seems to be pretty across most of the globe and China is now actively exporting lower prices again. Position accordingly.
Duration bets look attractive from a technical and fundamental perspective, and we have added duration risks to our portfolio over the past 24 hours. May inflation looks very soft from the early looks at it in Spain and Belgium. Germany and US to follow?
A massive key figure week is ahead of us, and we highlight the five most important charts to watch from a macroeconomic perspective.
AI is mana sent from heaven, while McCarthy and Biden have allegedly agreed on a debt ceiling deal. We continue to favor positions with a positive beta to slowing inflation despite the recent concerns around stickier for longer.
This week has marked a return of the higher inflation, higher bond yields and higher equities narrative. Is the disinflation trend broken? Have bank issues disappeared? Or why are we back fearing higher rates? We urge you to WATCH the USD and it ain’t necessarily good news.
Canadian CPI reignited some of the bond bearish fears in markets and Fed speakers are yet to completely throw in the towel on the hiking cycle. The pause is the base case, but weaker data is needed to fully convince central bankers.
Weeeeehoooooooooooo! Inflation is finally truly waning, but have we forgotten about the reason why inflation is declining? Disinflation is only mana from heaven for so long and the USD funding market stress looms!
Overall food for doves in the inflation report as some of the wage intensive categories show CLEAR signs of decelerating. Used cars increase a whooping 4.45% on the month and without it this would have been a HUGE dovish surprise.
Wednesday is back, and so is the weekly post where we highlight what we are currently spending our time looking at. Don’t miss out on the crucial tendencies in global macro presented in this shorter piece!
There are reasons to believe that the April inflation report will not be as soft as we’d like, but our chart book of leading indicators continues to hint at a sharp disinflation over the next 3-5 months.
It is inflation week after a strong labour market report that smelled of nothing but a continued hiking cycle. The inflation report is unlikely to look as soft as the Fed hopes for, and we find a long USD position warranted despite the debt ceiling looming
With German CPI being released today we have taken a deeper look into the wage negotiations in Germany, which might give a hint to how inflation dynamics will evolve in the future. Follow along in this short piece!
The banking crisis seems to be back, Asia is apparently the new black, and the hopes of an economic comeback in the West is vanishing. Things are certainly not as we thought a couple of months ago, but follow along as we look at the best hideouts in this week’s edition.
The term inflation has merged from academia to layman’s vocabulary. The question is whether it’s time to shelf the term or if it remains as relevant as ever. We look at forward-looking indicators and try to pass judgment – this time on Europe.
The first meeting with Ueda at the helm takes place this week. The Bank of Japan is under increasing pressure to act and the Finance Ministry (and Warren Buffet) seems to be preparing for higher interest rates.
Another strong IFO report from Germany on the surface of it, but is the European economy close to rolling over from a momentum perspective? Let’s have a look at the details.
The inflation report made for benign reading for monetary policy doves as a slightly more broad-based disinflation picture is starting to emerge. Will the Fed acknowledge the trend and pause in May? We think so.
With the banking turmoil leaving the headlines (for now), we turn our attention towards the main themes in the broader macro landscape. What’s going on with inflation? What will the Fed do? Is oil turning bullish? And what about Japan? As always we keep you updated on the 5 biggest themes of the week. Enjoy!
Peak inflation is in, but monetary policy works with “long and variable lags” as monetarists say. While Goods inflation is sliding, some areas are resilient and services inflation remains an issue. Even though expectations and soft data are perplexing, there are pockets of data indicating a fight-back to the weakening dove sentiment.
It is show- time for inflation but the sudden lack of interest in inflation is striking. The “street” whisper clearly expects a hot core inflation number, which makes us lean dovish for the report.
Inflation is already slowly but surely losing its limelight as the main concern for central banks for good reasons. No one will talk about inflation in 6 months, if forward looking indicators are right.
Welcome to our monthly update of our Macro Regime Model, which provides a forward-looking guidance into tactical asset allocation. The “QE-like” environment that we predicted for March proved spot on, but partly for the wrong reasons. Will the QE-vibes continue?
European inflation numbers are out this week, while most focus will gather around the weekly numbers from the Fed and Money Market Funds.
Calm is temporarily restored while First Republic Bank continues to suffer. Tech and Consumer Discretionary are underperformers when the calm is restored. The world is truly upside down right now.
The FOMC will likely decide to raise the Fed Funds target range by 25bps and regret it soon thereafter on Wednesday. Everything but the banking sector stress screams higher interest rates, why the Fed will attempt to regain control of the narrative.
We focus on three categories in today’s inflation print from the US. Shelter, Medical Services and Transportation Services. Overall, we find risks to be on the downside for inflation but mostly in March/April.
Powell is back as the hawk we knew from 2022, but the extreme data-dependency is volatility creating by design. One soft inflation and/or job report and we will back at where we were just a few weeks ago. Buckle up.
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.