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>At this point in the policy path, our Central Bank Sentiment trackers are showing some meaningful signs of life – not of all it totally anticipated.</li><li>Here we highlight some key observations made over the last month around what Central Bank language is actually telling us from a quantitative point of view.</li><li>We regularly track and update our measure of positivity/negativity of Bank language contained in statements, outlooks and speeches on a scale of -1 to +1.</li></ul>

At this point in the policy path, our Central Bank Sentiment trackers are showing some meaningful signs of life – not of all it totally anticipated.Here we highlight some key observations made over the last month around what Central Bank language is actually telling us from a quantitative point of view.We regularly track and update our measure of positivity/negativity of Bank language contained in statements, outlooks and speeches on a scale of -1 to +1.

Sentiment Nugget: What are Central Banks Actually Telling Us?

FX & Rates

<ul><li>Hello everyone, and welcome to a shorter piece on where to find fundamental value in the current FX environment.</li><li>We’ll take a trip back to the theory books and use some of the good old correlations and fundamental value metrics to give some insights on the best FX bets now that the tightening cycle is likely soon coming to an end.</li><li>Read along, as we run through the most important pairs below.</li></ul>

Hello everyone, and welcome to a shorter piece on where to find fundamental value in the current FX environment.We’ll take a trip back to the theory books and use some of the good old correlations and fundamental value metrics to give some insights on the best FX bets now that the tightening cycle is likely soon coming to an end.Read along, as we run through the most important pairs below.

Junior Finance Analyst, Steno Research

Ulrik Simmelholt

Junior Finance Analyst

<ul>
<li>Take aways: Correlation in the electricity and natural gas markets in Europe is increasing. Could energy stocks and commodities be the new diversifier?</li>
<li>JPY should be even weaker considering Nat Gas flows. This week an interesting development in the correlation between electricity prices and natural prices caught our attention as seen in the below chart.</li>
<li>Over the last 3 years we have seen the correlation between the two move higher and higher to a point where electricity prices are almost a mirrored reflection of what is going on in the gas markets.</li>
</ul>


Take aways: Correlation in the electricity and natural gas markets in Europe is increasing. Could energy stocks and commodities be the new diversifier?
JPY should be even weaker considering Nat Gas flows. This week an interesting development in the correlation between electricity prices and natural prices caught our attention as seen in the below chart.
Over the last 3 years we have seen the correlation between the two move higher and higher to a point where electricity prices are almost a mirrored reflection of what is going on in the gas markets.


Energy Cable #44 – Energy as a Diversifier + JPY Focus

Macroeconomics

<ul><li>We received the first inflation evidence from the Euro area already earlier today as the German regional office in Brandenburg released the preliminary October numbers printing at 0.0% MoM.</li><li>That is a very soft reading, fitting hand in glove with our dovish EUR-flation view, and it looks favorable both in unadjusted and seasonally adjusted terms.</li><li>A reasonable expectation (based on seasonal patterns + trend) would be to expect a 0.2-0.3% MoM print in Brandenburg for October, so it strengthens our case for a material dovish surprise.</li></ul>

We received the first inflation evidence from the Euro area already earlier today as the German regional office in Brandenburg released the preliminary October numbers printing at 0.0% MoM.That is a very soft reading, fitting hand in glove with our dovish EUR-flation view, and it looks favorable both in unadjusted and seasonally adjusted terms.A reasonable expectation (based on seasonal patterns + trend) would be to expect a 0.2-0.3% MoM print in Brandenburg for October, so it strengthens our case for a material dovish surprise.

EUR Inflation Watch: A Dovish Surprise in the Making

<ul><li>Takeaways: Some very gloomy signs in the IFO survey details with Capital Goods production expectations nose-diving in a recessionary fashionOn the other hand, the highly cyclical Chemicals industry, a large consumer of Natural Gas, is rebounding for the third month running.</li><li>Price pressures remain low in the forward looking survey, but there are signs of a stabilization/rebound.</li><li>EUR-flation is likely to bottom below 2%, but price pressures could re-emerge already during the spring according to the Ifo Survey.</li></ul>

Takeaways: Some very gloomy signs in the IFO survey details with Capital Goods production expectations nose-diving in a recessionary fashionOn the other hand, the highly cyclical Chemicals industry, a large consumer of Natural Gas, is rebounding for the third month running.Price pressures remain low in the forward looking survey, but there are signs of a stabilization/rebound.EUR-flation is likely to bottom below 2%, but price pressures could re-emerge already during the spring according to the Ifo Survey.

Ifo Watch: Signs of Disinflation Bottoming Out in Germany?

Germany

The euro is the official currency of the European Economic & Monetary Union. 

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Euro (USDEUR CURNCY)

Sentiment Nugget: What are Central Banks Actually Telling Us?

Looking back over the past 10 years, ECB sentiment into and over October has been more negative than at any other point.

Steno Research

FX Watch – Exploring FX Fundamentals

We’ll take a trip back to the theory books and use some of the good old correlations and fundamental value metrics to give some insights on the...

Steno Research

Energy Cable #44 – Energy as a Diversifier + JPY Focus

Correlation in the electricity and natural gas markets in Europe is increasing. Could energy stocks and commodities be the new diversifier?

Steno Research

EUR Inflation Watch: A Dovish Surprise in the Making

We received the first inflation evidence from the Euro area already earlier today as the German regional office inBrandenburg released the...

Steno Research

Ifo Watch: Signs of Disinflation Bottoming Out in Germany?

Takeaways: Some very gloomy signs in the IFO survey details with Capital Goods production expectations nose-diving in a recessionary fashion

Steno Research

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