Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

Macro and Geopolitical Research House

Steno Research

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

Cross Asset Strategy

<ul><li>Welcome back to our weekly positioning update.</li><li>It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest whether it was the beginning of a broader outflow from large cap / tech into small cap stocks and indices like Russell 2000, or if it was simply a hiccup due to extended positioning and a profound fear that the cutting cycle was already fully priced in, leaving tiny room for extensive gains in large cap stocks, which were up &gt;20% YTD before the CPI report.</li><li>We provide 3 reasons as to why it was not a rotation below.</li></ul>

Welcome back to our weekly positioning update.It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest whether it was the beginning of a broader outflow from large cap / tech into small cap stocks and indices like Russell 2000, or if it was simply a hiccup due to extended positioning and a profound fear that the cutting cycle was already fully priced in, leaving tiny room for extensive gains in large cap stocks, which were up &gt;20% YTD before the CPI report.We provide 3 reasons as to why it was not a rotation below.

Positioning Watch – There was no “rotation” from large to small caps

Macroeconomics

<ul><li>Recently, numerous JPY pairs have breached the levels where the BoJ / MoF intervened in April/May, prompting markets to wonder if (and when) authorities might step in again to support the Yen.</li><li>The reaction in USDJPY post key events/meetings has been consistently uniform for the past 12-18 months.</li><li>Markets build up a hawkish narrative prior to the event, only to unwind positions when the news turns out to be less hawkish than anticipated.</li></ul>

Recently, numerous JPY pairs have breached the levels where the BoJ / MoF intervened in April/May, prompting markets to wonder if (and when) authorities might step in again to support the Yen.The reaction in USDJPY post key events/meetings has been consistently uniform for the past 12-18 months.Markets build up a hawkish narrative prior to the event, only to unwind positions when the news turns out to be less hawkish than anticipated.

Japan Watch – Why BoJ Will NOT Intervene Anytime Soon

Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

FX & Rates

<ul><li>On December 6, 2023, Deputy Gov. Ryozo Himino and other policy board members signalled increasing optimism on price and wage increases.</li><li>Himino said at a press conference following a meeting on Wednesday that exiting the negative rate policy would have relatively little impact on Japan's economy.</li><li>"We will carefully assess the situation and consider the timing and procedure of how to exit" negative rates. </li></ul>

On December 6, 2023, Deputy Gov. Ryozo Himino and other policy board members signalled increasing optimism on price and wage increases.Himino said at a press conference following a meeting on Wednesday that exiting the negative rate policy would have relatively little impact on Japan's economy."We will carefully assess the situation and consider the timing and procedure of how to exit" negative rates. 

Part Two: JGB Yields Spike Cause Yen Mayhem

External broker reports(aggregated public sources), Scotiabank

Scotiabank

External broker reports(aggregated public sources)

Scotiabank’s global foreign exchange strategy team provides in-depth regional insights and macro-economic analysis for G10 and advanced economies, Asia Pacific, and Latin America. Find technical and fundamental strategy reports focused on trade ideas, market risks, and the unfolding macro outlook. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>We have revised our forecasts for the major currencies.</li><li>The weakness in the US dollar (USD) that we expected to develop over the second half of the year has not materialized.</li><li>Instead, a grind higher in the USD from the middle of the year was fueled by positive economic data and rising long-term yields amid simmering expectations that the Federal Reserve’s (Fed) tightening cycle could extend further. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We have revised our forecasts for the major currencies.The weakness in the US dollar (USD) that we expected to develop over the second half of the year has not materialized.Instead, a grind higher in the USD from the middle of the year was fueled by positive economic data and rising long-term yields amid simmering expectations that the Federal Reserve’s (Fed) tightening cycle could extend further. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

<ul>
<li>Our Fear &amp; Frenzy Sentiment Index hit Frenzy for the first time during this rally.</li>
<li>We marginally lower the weight of Developed Market Equities since we are already underweight risky assets, which, unlike 2022, has not paid off this year.</li>
<li>In addition, we close our inflation-linked bond and Yen trade.</li>
</ul>


Our Fear &amp; Frenzy Sentiment Index hit Frenzy for the first time during this rally.
We marginally lower the weight of Developed Market Equities since we are already underweight risky assets, which, unlike 2022, has not paid off this year.
In addition, we close our inflation-linked bond and Yen trade.


Changes in Portfolio Weights: Sentiment Hits ‘Frenzy,’ We Comply

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EURJPY (EURJPY BGN CURNCY)

Positioning Watch – There was no “rotation” from large to small caps

Welcome back to our weekly positioning update. It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest...

Steno Research

Japan Watch – Why BoJ Will NOT Intervene Anytime Soon

Recently, numerous JPY pairs have breached the levels where the BoJ / MoF intervened in April/May, prompting markets to wonder if (and when)...

Steno Research

Part Two: JGB Yields Spike Cause Yen Mayhem

USDJPY fell by 3.85% and closed lower by 2.20%; the z-score fell by more than 2.25 (for 60 days). It was the most significant decline in the z...

Untying The Gordian Knot

Foreign Exchange Outlook - November 2023

We have revised our forecasts for the major currencies. The weakness in the US dollar (USD) that we expected to develop over the second half of the...

Scotiabank

Changes in Portfolio Weights: Sentiment Hits ‘Frenzy,’ We Comply

Our Fear & Frenzy Sentiment Index hit Frenzy for the first time during this rally, telling us to lower the weight of equities.

Jeroen Blokland

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)