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>USD markets felt almost EM like for a couple of hours after Jay Powell and the committee allowed markets to chase the cutting narrative by communicating three expected cuts in the dot plot for 2024.</li><li>I am not always convinced that the dot plot is a wise guidance tool as policy makers likely judge that a dot signaling three cuts relative to market pricing (ahead of the meeting) hinting of more than four cuts net/net should lead to a hawkish surprise.</li><li>The opposite of course happened since narrative chasers in markets rather look at the sequential move than the nominal forecast.</li></ul>

USD markets felt almost EM like for a couple of hours after Jay Powell and the committee allowed markets to chase the cutting narrative by communicating three expected cuts in the dot plot for 2024.I am not always convinced that the dot plot is a wise guidance tool as policy makers likely judge that a dot signaling three cuts relative to market pricing (ahead of the meeting) hinting of more than four cuts net/net should lead to a hawkish surprise.The opposite of course happened since narrative chasers in markets rather look at the sequential move than the nominal forecast.

Central Bank Review: Powell, a Genius or a Madman? 2024 Looks like a Year of Fat Tails

Cross Asset Strategy

<ul><li>Markets are pricing in heavy cuts for next year as inflation keeps coming in soft, making a soft landing the base case for the bulls, but everything comes at a price.</li><li>But how are assets likely to perform if the market narrative is correct and yields will indeed come down in a continued bull-steepening fashion, which in our view is the most likely scenario in H1 2024?</li><li>We have pulled out some of our cross-asset beta studies from our data-library to provide you with an overview of how assets perform during various yield curve regimes.</li></ul>

Markets are pricing in heavy cuts for next year as inflation keeps coming in soft, making a soft landing the base case for the bulls, but everything comes at a price.But how are assets likely to perform if the market narrative is correct and yields will indeed come down in a continued bull-steepening fashion, which in our view is the most likely scenario in H1 2024?We have pulled out some of our cross-asset beta studies from our data-library to provide you with an overview of how assets perform during various yield curve regimes.

Bull Steepening Watch – Is Lower Yields Really What Risk Assets Want?

Head of Research, Steno Research

Emil Moller

Head of Research

<ul><li>As we move beyond the final Fed decision of the year, we can speculate on how the EM space may respond to Powell’s press conference tonight.</li><li>Before diving into that, let’s discuss some recent developments that have occurred in China since our last update on the situation in Beijing.</li><li>While the market and all the mainstream news outlets have been awaiting the third plenum to take place in vain,  China’s Central Economic Work Conference was held the past two days.</li></ul>

As we move beyond the final Fed decision of the year, we can speculate on how the EM space may respond to Powell’s press conference tonight.Before diving into that, let’s discuss some recent developments that have occurred in China since our last update on the situation in Beijing.While the market and all the mainstream news outlets have been awaiting the third plenum to take place in vain,  China’s Central Economic Work Conference was held the past two days.

EM by EM #34: Xi’s Whip and Powell’s Kneeling

<ul>
<li>It’s central bank week once again, and that of course calls for us to share our thoughts ahead of the biggest meeting over the next week with Powell being the first to take the stage on Wednesday, expecting to hawk up the rhetoric a bit whilst keeping the Fed funds upper band steady at 5.5%.</li>
<li>The ECB has recently claimed the title as the most dovish central bank in G10 after markets have added roughly 20 bps of cuts in 2024 to market pricing, and markets now price in approx.</li>
<li>115 bps of cuts in 2024.</li>
</ul>


It’s central bank week once again, and that of course calls for us to share our thoughts ahead of the biggest meeting over the next week with Powell being the first to take the stage on Wednesday, expecting to hawk up the rhetoric a bit whilst keeping the Fed funds upper band steady at 5.5%.
The ECB has recently claimed the title as the most dovish central bank in G10 after markets have added roughly 20 bps of cuts in 2024 to market pricing, and markets now price in approx.
115 bps of cuts in 2024.


5 (+1) Central Banks We Watch – Fed, ECB, BoE, Norge’s Bank, BoJ & BCB

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 is trading lower ahead of the US CPI print at 8.30ET.</li>
<li>The USD rebound through early December may be peaking but soft inflation data will be needed to add to the softer tone that is developing as the DXY shows signs of topping out around the 104.20 area —the 38.2% Fibonacci retracement of the November drop in the index.</li>
<li>Trading overnight reflects a somewhat positive tone, adding to USD headwinds. Stocks are flattish in Europe but US equity futures are trading in the green.</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>


FX Market Update —The USD is trading lower ahead of the US CPI print at 8.30ET.
The USD rebound through early December may be peaking but soft inflation data will be needed to add to the softer tone that is developing as the DXY shows signs of topping out around the 104.20 area —the 38.2% Fibonacci retracement of the November drop in the index.
Trading overnight reflects a somewhat positive tone, adding to USD headwinds. Stocks are flattish in Europe but US equity futures are trading in the green.

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 Daily - USD Slips Ahead of CPI, CAD Underperforms

United States

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Central Bank Review: Powell, a Genius or a Madman? 2024 Looks like a Year of Fat Tails

We reiterate that the steepener trade is the best risk/reward in Macro space accordingly as it likes both (fat) tail scenarios.

Steno Research

Bull Steepening Watch – Is Lower Yields Really What Risk Assets Want?

Let’s run through each asset class to see where to put your eggs if a bull-steepening of the yield curve continues into 2024.

Steno Research

EM by EM #34: Xi’s Whip and Powell’s Kneeling

Despite aiming for growth, China won’t employ potent fiscal or monetary policies; instead, the focus is on boosting confidence and shaping a...

Steno Research

5 (+1) Central Banks We Watch – Fed, ECB, BoE, Norge’s Bank, BoJ & BCB

It’s central bank week once again, and that of course calls for us to share our thoughts ahead of the biggest meeting over the next week with...

Steno Research

FX Daily - USD Slips Ahead of CPI, CAD Underperforms

The USD rebound through early December may be peaking but soft inflation data will be needed to add to the softer tone that is developing as the...

Scotiabank

Price Gauge

52-week Range

Market Cap (USDm)

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