Podcast by J.P. Morgan analysts on global markets, At Any Rate

At Any Rate

Podcast by J.P. Morgan analysts on global markets

Analysts from J.P. Morgan’s Research team take a closer look at the stories behind some of the biggest trends, themes and developments in markets today.

Cross Asset Strategy

<ul><li>Money fund balances have continued to grow despite Fed rate cuts due to attractive yields relative to other liquidity products</li><li>Most of the cash in money funds is liquidity money, making them a compelling place to park cash</li><li>Money funds tend to see inflows heading into an easing cycle and persist even as the yield curve begins to disinvert or steepen, with outflows only occurring once the curve stabilizes.</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Money fund balances have continued to grow despite Fed rate cuts due to attractive yields relative to other liquidity productsMost of the cash in money funds is liquidity money, making them a compelling place to park cashMoney funds tend to see inflows heading into an easing cycle and persist even as the yield curve begins to disinvert or steepen, with outflows only occurring once the curve stabilizes.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

US Rates: Cash on the sidelines or just cash?

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.

Macroeconomics

<ul><li>Hello everyone, and welcome back to our weekly positioning update!</li><li>Everything is about China these days, with both the PBoC and the Politburo preparing stimulus packages to save the Chinese economy from its nasty downturn.</li><li>While the stimulus initiatives are not very large, relatively speaking (roughly a percentage of GDP on average across stimulus packages), markets clearly see the heavy amounts of proposed stimulus as a “whatever it takes” signal, sparking a strong momentum trend in the Hang Seng and China proxies.</li></ul>

Hello everyone, and welcome back to our weekly positioning update!Everything is about China these days, with both the PBoC and the Politburo preparing stimulus packages to save the Chinese economy from its nasty downturn.While the stimulus initiatives are not very large, relatively speaking (roughly a percentage of GDP on average across stimulus packages), markets clearly see the heavy amounts of proposed stimulus as a “whatever it takes” signal, sparking a strong momentum trend in the Hang Seng and China proxies.

Positioning Watch – Markets Are Moving Away from the US (in FI)

<ul><li>September’s month-end is always a significant period for xCcy markets, primarily due to window-dressing by financial institutions and the upcoming 3-month rolling into year-end.</li><li>This leads to heightened volatility and liquidity adjustments, particularly noticeable around the xCcy basis.</li><li>How bad will it be this year?</li></ul>

September’s month-end is always a significant period for xCcy markets, primarily due to window-dressing by financial institutions and the upcoming 3-month rolling into year-end.This leads to heightened volatility and liquidity adjustments, particularly noticeable around the xCcy basis.How bad will it be this year?

Liquidity Nugget: The worst turn liquidity in years

Junior Finance Analyst, Steno Research

Ulrik Simmelholt

Junior Finance Analyst

<ul><li>We begin with the Ifo Employment Barometer, which took a sharp downward turn, reinforcing the recessionary signals from last month’s data.</li><li>In our view, it’s only a matter of time before Lagarde shifts her focus from inflation to employment, much like the Fed has done.</li><li>Our models suggest year-over-year inflation will reach 2% by early 2025, making employment the likely next priority. </li></ul>

We begin with the Ifo Employment Barometer, which took a sharp downward turn, reinforcing the recessionary signals from last month’s data.In our view, it’s only a matter of time before Lagarde shifts her focus from inflation to employment, much like the Fed has done.Our models suggest year-over-year inflation will reach 2% by early 2025, making employment the likely next priority. 

Ifo Nugget: It’s beginning to smell like recession

<ul>
<li>As we enter the historically weak 7–10 days for markets, it’s a good time to be cautious.</li>
<li>Banks are also preparing for quarter- and year-end window dressing, which tends to drain liquidity as they park USDs at the Fed to clean up balance sheets.</li>
<li>We expect $225 billion to leave the market by month’s end, tightening liquidity more than in 2023 but less than in 2022.</li>
</ul>


As we enter the historically weak 7–10 days for markets, it’s a good time to be cautious.
Banks are also preparing for quarter- and year-end window dressing, which tends to drain liquidity as they park USDs at the Fed to clean up balance sheets.
We expect $225 billion to leave the market by month’s end, tightening liquidity more than in 2023 but less than in 2022.


Week at a Glance – Are We Getting More 50s Across the Globe?

United States

The euro is the official currency of the European Economic & Monetary Union.  The US dollar is the official currency of the United States of America.

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US Rates: Cash on the sidelines or just cash?

Money fund balances are growing despite rate cuts, with AUMs at a record high of $6.6 trillion, offering compelling yields compared to deposits and...

At Any Rate

Positioning Watch – Markets Are Moving Away from the US (in FI)

Hello everyone, and welcome back to our weekly positioning update!Everything is about China these days, with both the PBoC and the Politburo...

Steno Research

Liquidity Nugget: The worst turn liquidity in years

September’s month-end is always a significant period for xCcy markets, primarily due to window-dressing by financial institutions and the upcoming...

Steno Research

Ifo Nugget: It’s beginning to smell like recession

Take away: It’s a matter of time before the labor market has Lagarde’s full attentionSoft and hard data now starting to align in Germany Time to...

Steno Research

Week at a Glance – Are We Getting More 50s Across the Globe?

As we enter the historically weak 7–10 days for markets, it’s a good time to be cautious. Banks are also preparing for quarter- and year-end...

Steno Research

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