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>Welcome to the first 2024 edition of our ‘5 Things We Watch’, where we as always try to dissect global macro trends, how we see the world and how we trade it.</li><li>The overall consensus this year seems to be locked in on a soft landing in the US, but in our view, risks of tail-end events are increasing, making macro more important than ever in order to navigate financial markets in 2024.</li><li>Freight rates on routes with destinations in the Mediterranean (both shipments from Middle East and China) have generally been on the rise </li></ul>

Welcome to the first 2024 edition of our ‘5 Things We Watch’, where we as always try to dissect global macro trends, how we see the world and how we trade it.The overall consensus this year seems to be locked in on a soft landing in the US, but in our view, risks of tail-end events are increasing, making macro more important than ever in order to navigate financial markets in 2024.Freight rates on routes with destinations in the Mediterranean (both shipments from Middle East and China) have generally been on the rise 

5 Things We Watch – Freight Rates, Positioning, Liquidity, EUR-flation, Growth

<ul><li>The smallest German state, Saarland, sneaked out its preliminary December inflation this morning and it was another soft surprise.</li><li>Saarland CPI increased a tad less than 0.1% on the month, which is below 0.2% in seasonally adjusted terms.</li><li>This is if anything a SOFT print relative to consensus expectations and as Saarland CPI explains 78% of the variability in the nationwide German CPI, it leaves a 0.1% MoM inflation print most likely for the German CPI.</li></ul>

The smallest German state, Saarland, sneaked out its preliminary December inflation this morning and it was another soft surprise.Saarland CPI increased a tad less than 0.1% on the month, which is below 0.2% in seasonally adjusted terms.This is if anything a SOFT print relative to consensus expectations and as Saarland CPI explains 78% of the variability in the nationwide German CPI, it leaves a 0.1% MoM inflation print most likely for the German CPI.

EUR Inflation Watch – The ECB forecast is OFF by >1.5%-points for Q1

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.

FX & Rates

<ul><li>FX Market Update—The USD ended 2023 on a soft note, but a little off the low made on December 28th which was the lowest the DXY traded at since July.</li><li>Overall, the DXY registered a down year in 2023, losing around 4% overall after two years of solid gains.</li><li>The holiday period has been relatively quiet. The JPY and CHF have tended to outperform since the 24th while sterling and the EUR are relative underperformers among the majors—but are effectively little changed since just before the holiday break. </li></ul>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.

FX Market Update—The USD ended 2023 on a soft note, but a little off the low made on December 28th which was the lowest the DXY traded at since July.Overall, the DXY registered a down year in 2023, losing around 4% overall after two years of solid gains.The holiday period has been relatively quiet. The JPY and CHF have tended to outperform since the 24th while sterling and the EUR are relative underperformers among the majors—but are effectively little changed since just before the holiday break. 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.

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.

<ul><li>German nominal yields have fallen less than those in the UK and the US.</li><li>There are two possible outcomes: either Germany's yields will catch up with those of its peers, or in the event of a correction or reversal, Germany may experience the most significant upside in yields and equity underperformance.</li><li>The German yield curve has remained flat compared to the US and has outperformed the UK's yield curve.</li></ul>

German nominal yields have fallen less than those in the UK and the US.There are two possible outcomes: either Germany's yields will catch up with those of its peers, or in the event of a correction or reversal, Germany may experience the most significant upside in yields and equity underperformance.The German yield curve has remained flat compared to the US and has outperformed the UK's yield curve.

<ul>
<li>The overwhelming consensus for 2024 continues to be a soft landing in the US with interest rates coming firmly down while growth continues on autopilot, which leaves a very decent, almost goldilocksy, outlook for risk assets.</li>
<li>But what if we don’t end in a soft landing, but rather one of the tail-end scenarios of either 1) a boom driven by easier financial conditions, which would force the Fed to push back a bit on rate cuts or 2) a recession, which would imply rates much lower than what consensus currently is.</li>
<li>We have chosen 5 “likely unlikely” scenarios for 2024, which are not as unlikely as current market pricing indicates.</li>
</ul>


The overwhelming consensus for 2024 continues to be a soft landing in the US with interest rates coming firmly down while growth continues on autopilot, which leaves a very decent, almost goldilocksy, outlook for risk assets.
But what if we don’t end in a soft landing, but rather one of the tail-end scenarios of either 1) a boom driven by easier financial conditions, which would force the Fed to push back a bit on rate cuts or 2) a recession, which would imply rates much lower than what consensus currently is.
We have chosen 5 “likely unlikely” scenarios for 2024, which are not as unlikely as current market pricing indicates.


5 Things That Could Wrongfoot Consensus in 2024

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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5 Things We Watch – Freight Rates, Positioning, Liquidity, EUR-flation, Growth

Welcome to the first 2024 edition of our ‘5 Things We Watch’, where we as always try to dissect global macro trends, how we see the world and how...

Steno Research

EUR Inflation Watch – The ECB forecast is OFF by >1.5%-points for Q1

The smallest German state, Saarland, sneaked out its preliminary December inflation this morning and it was another soft surprise. Saarland CPI...

Steno Research

FX Daily - Oversold USD Rebounds

The USD ended 2023 on a soft note, but a little off the low made on December 28th which was the lowest the DXY traded at since July.

Scotiabank

Part Five: The German Vulnerability

The fact that the UK yield curve has flattened more than Germany's is puzzling. This could indicate that the UK economy is on the brink of a deep...

Untying The Gordian Knot

5 Things That Could Wrongfoot Consensus in 2024

The overwhelming consensus for 2024 continues to be a soft landing in the US with interest rates coming firmly down while growth continues on...

Steno Research

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