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>Hello everyone, and welcome back to our weekly positioning overview.</li>
<li>We’ve been working on some new ways to look at positioning data across asset classes, and we’ll share some of the inaugural charts in today’s piece and will extend them, week by week.</li>
<li>Markets have more or less traded sideways since the start of the year, as the risk-on party has taken a bit of a breather it seems, despite rate cut expectations becoming even more embedded after the hawkish US CPI surprise last Thursday – strange move, and we’ll be surprised if probabilities don’t reverse within the next couple of price data points.</li>
</ul>


Hello everyone, and welcome back to our weekly positioning overview.
We’ve been working on some new ways to look at positioning data across asset classes, and we’ll share some of the inaugural charts in today’s piece and will extend them, week by week.
Markets have more or less traded sideways since the start of the year, as the risk-on party has taken a bit of a breather it seems, despite rate cut expectations becoming even more embedded after the hawkish US CPI surprise last Thursday – strange move, and we’ll be surprised if probabilities don’t reverse within the next couple of price data points.


Positioning Watch – Where to Find Value Currently

Political Analyst | Steno Research, Steno Research

Anne Sandager

Political Analyst | Steno Research

Macroeconomics

<ul>
<li>Amidst the prospect of a soft landing and lower interest rates, the European Council unanimously voted in favor of reinstating fiscal safeguards for EU member states after a 4-year pause during the pandemic.</li>
<li>The Stability and Growth Pact – the formal name of the fiscal rulebook – gives the EU the ability to impose monetary fines on member states with debt-to-GDP ratios above 60% and/or budget deficits exceeding -3%.</li>
<li>The pact was temporarily waived to allow states to undertake counter-cyclical investments and debt intake during the pandemic and subsequent energy crisis.</li>
</ul>


Amidst the prospect of a soft landing and lower interest rates, the European Council unanimously voted in favor of reinstating fiscal safeguards for EU member states after a 4-year pause during the pandemic.
The Stability and Growth Pact – the formal name of the fiscal rulebook – gives the EU the ability to impose monetary fines on member states with debt-to-GDP ratios above 60% and/or budget deficits exceeding -3%.
The pact was temporarily waived to allow states to undertake counter-cyclical investments and debt intake during the pandemic and subsequent energy crisis.


NEW EU FISCAL RULES – Victory for the Expansionists or the Prudentials?

<ul><li>From the fresh IFO report details (on prices, orders and employment intentions), the majority of industries expect exports to decline in the months ahead.</li><li>These include automakers, who had recently been assuming that exports would remain constant.</li><li>Manufacturers of machinery and equipment are also expecting fewer orders from abroad, while energy-intensive industries such as the chemical, metal and construction industries are having a particularly tough time at the moment.</li></ul>

From the fresh IFO report details (on prices, orders and employment intentions), the majority of industries expect exports to decline in the months ahead.These include automakers, who had recently been assuming that exports would remain constant.Manufacturers of machinery and equipment are also expecting fewer orders from abroad, while energy-intensive industries such as the chemical, metal and construction industries are having a particularly tough time at the moment.

IFO Nugget: Recession and Target Inflation?

<ul><li>Powell invited for a yuuuge risk asset party this week by allowing the market to continue to chase the narrative of material rate cuts in 2024.</li><li>This is (again) reminiscent of the 2006-2007 pause when the Fed allowed financial conditions to ease materially in the run-up to the recession.</li><li>During a hiking cycle, loads and loads of USDs are parked in cash-like setups due to a sudden better relative yield premium in almost risk-free structures.</li></ul>

Powell invited for a yuuuge risk asset party this week by allowing the market to continue to chase the narrative of material rate cuts in 2024.This is (again) reminiscent of the 2006-2007 pause when the Fed allowed financial conditions to ease materially in the run-up to the recession.During a hiking cycle, loads and loads of USDs are parked in cash-like setups due to a sudden better relative yield premium in almost risk-free structures.

Steno Signals #78 – Santa Powell Handing Out Gifts Even to the Naughty!

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>This week’s CFTC data reflect a deepening of USD bearish sentiment among investors.</li><li>Aggregate USD short positioning by Non -Commercial (speculative) accounts doubled in the week through Tuesday to reach USD6.3bn.</li><li>Additional data shows Leveraged Accounts (hedge funds) reducing net USD longs slightly but exposure is holding close to recent levels.</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>

This week’s CFTC data reflect a deepening of USD bearish sentiment among investors.Aggregate USD short positioning by Non -Commercial (speculative) accounts doubled in the week through Tuesday to reach USD6.3bn.Additional data shows Leveraged Accounts (hedge funds) reducing net USD longs slightly but exposure is holding close to recent levels.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.

Weekly CFTC Sentiment Report - Bearish USD Sentiment Grows, JPY Shorts Covered

Germany

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

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Positioning Watch – Where to Find Value Currently

Markets have more or less traded sideways since the start of the year, as the risk-on party has taken a bit of a breather it seems, despite rate...

Steno Research

NEW EU FISCAL RULES – Victory for the Expansionists or the Prudentials?

Amidst the prospect of a soft landing and lower interest rates, the European Council unanimously voted in favor of reinstating fiscal safeguards...

Steno Research

IFO Nugget: Recession and Target Inflation?

There is no way around the fact that, no matter how many officials refrain from admitting it, Germany and central economies in Europe are in, at...

Steno Research

Steno Signals #78 – Santa Powell Handing Out Gifts Even to the Naughty!

Powell invited for a yuuuge risk asset party this week by allowing the market to continue to chase the narrative of material rate cuts in 2024.

Steno Research

Weekly CFTC Sentiment Report - Bearish USD Sentiment Grows, JPY Shorts Covered

Aggregate USD short positioning by Non -Commercial (speculative) accounts doubled in the week through Tuesday to reach USD6.3bn.

Scotiabank

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52-week Range

Market Cap (USDm)

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