Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>The FOMC cut the Fed Funds rate by 25bp as expected, but its median projection showed just 50bp of rate cuts in 2025 (down from 100bp projected in Sep'24). </li>
<li>M2 has steadily accelerated since Mar'24, rising 3.3%YoY in Oct'24. Unsurprisingly, core PCE and core CPI inflation have moved higher from their Jul'24 trough to 3.32%YoY(Nov'24) and 2.8%YoY(Oct'24) respectively. </li>
<li>No rate cuts likely in Q1CY25, as fiscal stimulus (6.3% of GDP in Oct'23-Sep'24) keeps boosting RGDP growth and inflation. DOGE spending cuts &amp; declining Brent key to Jun'25 cut.</li>
</ul>


The FOMC cut the Fed Funds rate by 25bp as expected, but its median projection showed just 50bp of rate cuts in 2025 (down from 100bp projected in Sep'24). 
M2 has steadily accelerated since Mar'24, rising 3.3%YoY in Oct'24. Unsurprisingly, core PCE and core CPI inflation have moved higher from their Jul'24 trough to 3.32%YoY(Nov'24) and 2.8%YoY(Oct'24) respectively. 
No rate cuts likely in Q1CY25, as fiscal stimulus (6.3% of GDP in Oct'23-Sep'24) keeps boosting RGDP growth and inflation. DOGE spending cuts &amp; declining Brent key to Jun'25 cut.


US: FOMC's Hawkish Outlook Is Optimistic Without a Fiscal Complement

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.

<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

Cross Asset Strategy

<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!

Political Analyst | Steno Research, Steno Research

Anne Sandager

Political Analyst | Steno Research

<ul><li>The U.S government will shut down November 17th if a full Congress doesn’t pass 12 individual budget laws – or so-called appropriations – or adopt another Continuing Resolution (CR) that would extend the FY23 budget. </li><li>A new CR is hard to imagine given that the GOP lost their former Speaker, Kevin McCarthy, after the first CR was passed. </li><li>The U.S federal debt has undoubtedly featured heavily in the closed-door Speaker negotiations in the Republican Caucus. Cutting the nation’s $33 trillion dollar debt is a big priority among the far-right members of the GOP who ousted McCarthy – members who want promises heading into budget negotiations. </li></ul>

The U.S government will shut down November 17th if a full Congress doesn’t pass 12 individual budget laws – or so-called appropriations – or adopt another Continuing Resolution (CR) that would extend the FY23 budget. A new CR is hard to imagine given that the GOP lost their former Speaker, Kevin McCarthy, after the first CR was passed. The U.S federal debt has undoubtedly featured heavily in the closed-door Speaker negotiations in the Republican Caucus. Cutting the nation’s $33 trillion dollar debt is a big priority among the far-right members of the GOP who ousted McCarthy – members who want promises heading into budget negotiations. 

US Policy Watch: Speakership chaos and IRA explained

Head of Research, Steno Research

Emil Moller

Head of Research

<ul><li>With the disinflation narrative starting to catch momentum, a long-awaited process that we have anticipated would kick in late Q1 or early Q2, we are back on track for a global economic cooldown.</li><li>Central bankers are slowly but surely conceding to inflation being the last war and as they shift their primary focus shifts toward keeping the bottom up on the economy and avoiding the nasty R-word to spread.</li><li>Recently Knot in ECB has turned his back on the hawk line which is the first step toward an actual pivot as hardliners need to cede ground to the doves in the council:Chart 1: ECB Governing Council: Knot moving toward Center, more to follow?</li></ul>

With the disinflation narrative starting to catch momentum, a long-awaited process that we have anticipated would kick in late Q1 or early Q2, we are back on track for a global economic cooldown.Central bankers are slowly but surely conceding to inflation being the last war and as they shift their primary focus shifts toward keeping the bottom up on the economy and avoiding the nasty R-word to spread.Recently Knot in ECB has turned his back on the hawk line which is the first step toward an actual pivot as hardliners need to cede ground to the doves in the council:Chart 1: ECB Governing Council: Knot moving toward Center, more to follow?

Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?

United States

iShares MSCI USA Equal Weighted ETF is an exchange-traded fund incorporated in the USA. The ETF seeks to track the investment results of an index composed of equal weighted U.S. equities.

ishares msci usa equal weighted etf (EUSA US)

US: FOMC's Hawkish Outlook Is Optimistic Without a Fiscal Complement

We expect no rate cuts in Q1CY25, as M2 growth (3.3%YoY Oct'24) and fiscal stimulus (6.3% of GDP in year to Sep'24) are boosting growth. A Jun'25...

Prasenjit K. Basu

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

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

US Policy Watch: Speakership chaos and IRA explained

The U.S. House of Representatives woke up this morning to the 22nd day without a Speaker. 4 nominees have come and gone, and today it is junior...

Steno Research

Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?

With the disinflation narrative starting to catch momentum, a long-awaited process that we have anticipated would kick in late Q1 or early Q2, we...

Steno Research

US: FOMC's Hawkish Outlook Is Optimistic Without a Fiscal Complement

​We expect no rate cuts in Q1CY25, as M2 growth (3.3%YoY Oct'24) and fiscal stimulus (6.3% of GDP in year to Sep'24) are boosting growth. A Jun'25...

Prasenjit K. Basu

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

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

US Policy Watch: Speakership chaos and IRA explained

The U.S. House of Representatives woke up this morning to the 22nd day without a Speaker. 4 nominees have come and gone, and today it is junior...

Steno Research

Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?

With the disinflation narrative starting to catch momentum, a long-awaited process that we have anticipated would kick in late Q1 or early Q2, we...

Steno Research

We expect no rate cuts in Q1CY25, as M2 growth (3.3%YoY Oct'24) and fiscal stimulus (6.3% of GDP in year to Sep'24) are boosting growth. A Jun'25...