Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<ul>
<li>The Indonesian rupiah has outperformed most EM currencies, particularly other Asian currencies, and has done so with low volatility in contrast with the rising volatility of the EM FX index.</li>
<li>Looking ahead, headwinds may be appearing with the interest-rate differential working against the currency as the Fed starts raising rates and higher inflation leading to lower real rates.</li>
<li>While the rise in commodity prices is generating trade surpluses for now, the current account may turn negative from positive with a rise in imports accompanying the economy's reopening.</li>
</ul>


The Indonesian rupiah has outperformed most EM currencies, particularly other Asian currencies, and has done so with low volatility in contrast with the rising volatility of the EM FX index.
Looking ahead, headwinds may be appearing with the interest-rate differential working against the currency as the Fed starts raising rates and higher inflation leading to lower real rates.
While the rise in commodity prices is generating trade surpluses for now, the current account may turn negative from positive with a rise in imports accompanying the economy's reopening.


Indonesian Rupiah Shines in Volatile Times

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 our weekly EM editorial where we travel across the liquid EM markets in the context of recent developments in USD markets.</li><li>ISM Services jumped back to 53.8—time to put that recession chatter to bed for a few months again?</li><li>Bloomberg’s latest alarmist piece on “business employment dynamics” showing a net job loss in Q3 of last year is probably the worst analysis I have read in a while.</li></ul>

Welcome to our weekly EM editorial where we travel across the liquid EM markets in the context of recent developments in USD markets.ISM Services jumped back to 53.8—time to put that recession chatter to bed for a few months again?Bloomberg’s latest alarmist piece on “business employment dynamics” showing a net job loss in Q3 of last year is probably the worst analysis I have read in a while.

EM Watch: The China bet and the copper story are both old hat by now

<ul>
<li>I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I quickly realized that most PMs in the region agreed on my take on the imminent risk of a devaluation of the CNY.</li>
<li>USD/CNH call options are popular/consensus in the Asian Macro PM space, but interestingly there is no consensus around the contagion from a devaluation of the USDCNY.</li>
<li>The discussions I had pointed in all directions, meaning that a CNY devaluation holds the potential to turn into a macro earthquake, despite it already being a consensus position.</li>
</ul>


I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I quickly realized that most PMs in the region agreed on my take on the imminent risk of a devaluation of the CNY.
USD/CNH call options are popular/consensus in the Asian Macro PM space, but interestingly there is no consensus around the contagion from a devaluation of the USDCNY.
The discussions I had pointed in all directions, meaning that a CNY devaluation holds the potential to turn into a macro earthquake, despite it already being a consensus position.


Steno Signals #97 – 5 reasons why the CNY will be devalued next week and how to trade it

Elias Lisberg Glistrup

Cross Asset Strategy

<ul><li>With the turn of October, it’s time for our monthly evaluation of both the present and coming month’s macroeconomic conditions, in which we weigh risks against rewards.</li><li>In order to do so, we employ both our Macro Regime Indicator framework and the interactive Structural Asset Allocation Model.</li><li>In combination, these tools provide an empirically rooted portfolio allocation, given the identified macro conditions and drivers in financial markets.</li></ul>

With the turn of October, it’s time for our monthly evaluation of both the present and coming month’s macroeconomic conditions, in which we weigh risks against rewards.In order to do so, we employ both our Macro Regime Indicator framework and the interactive Structural Asset Allocation Model.In combination, these tools provide an empirically rooted portfolio allocation, given the identified macro conditions and drivers in financial markets.

Macro Regime Indicator: Heavy Long in Cyclical FX

<ul><li>Every month, we present our best evaluation of the present and approaching month’s macroeconomic conditions, balancing risks and rewards.</li><li>We put to use our Macro Regime Indicator framework, alongside the interactive Structural Asset Allocation Model, to carry out this analysis.</li><li>Coming into September, we wrote that: “Looking ahead, we do not expect sudden shocks or changes to the current conditions.</li></ul>

Every month, we present our best evaluation of the present and approaching month’s macroeconomic conditions, balancing risks and rewards.We put to use our Macro Regime Indicator framework, alongside the interactive Structural Asset Allocation Model, to carry out this analysis.Coming into September, we wrote that: “Looking ahead, we do not expect sudden shocks or changes to the current conditions.

Macro Regime Model: Inflation down while growth is on the up?

Poland

The Polish Zloty dollar is the official currency of Poland

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Indonesian Rupiah Shines in Volatile Times

The Indonesian rupiah has outperformed most other EM currencies but headwinds may be appearing for the currency as the Fed starts raising rates and...

Gautam Jain, PhD, CFA

EM Watch: The China bet and the copper story are both old hat by now

Welcome to our weekly EM editorial where we travel across the liquid EM markets in the context of recent developments in USD markets. ISM Services...

Steno Research

Steno Signals #97 – 5 reasons why the CNY will be devalued next week and how to trade it

Happy Sunday from a sunny Copenhagen. I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I...

Steno Research

Macro Regime Indicator: Heavy Long in Cyclical FX

We anticipate consistent QT in both USDs and EURs in the forthcoming month. On a 3-month time frame, and given the assumed conditions, our model...

Steno Research

Macro Regime Model: Inflation down while growth is on the up?

Every month, we present our best evaluation of the present and approaching month’s macroeconomic conditions, balancing risks and rewards. We put...

Steno Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)