Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

What if World Cup teams competed on the basis of economic growth? We answer this question by using a factor-based model that takes into account growth "consistency and momentum", "stamina", "surprise potential" and "visibility". Using this data set, we generate a ranking of the most "growth-competitive" World Cup teams. We overlaid our findings on the World Cup 2018 bracket and simulated matches - with interesting results.We hope you enjoy this unconventional - hopefully informative - insight piece as much as we did crunching the numbers. Good luck with your World Cup bracket ... and with global macro markets.Highlights:<ul><li>In our tournament, Serbia comes out on top, followed by Switzerland, Australia and Russia. Egypt, Nigeria, Tunisia and Japan also earn spots in the Quarterfinals.</li><li>Some trade ideas inspired by our analysis of "growth competitiveness" include going long Serbia external debt, Australian Dollar (vs USD or CNH), domestic- and consumption-focused Russian equities and (potentially) the Swiss Franc (vs EUR once ECB QE exit is underway).</li><li>At the bottom of the pack are England, Sweden and Mexico. Poor growth profiles here bias us to short their respective currencies: GBP, SEK (vs NOK) and MXN (vs CAD).</li><li>In a fantasy scenario that includes the US, China, India and Italy, the US would easily make it to the Round of 16. India has a shot, but its advance would depend on its draw, while China and Italy are likely to be knocked out in the Group Stage.</li><li>Not surprisingly, there is no significant relationship between "growth competitiveness" and the FIFA/Coca-Cola World Ranking and bookmaker odds. But with consensus favorites - Brazil, Germany and Spain - collectively having a 60% chance of victory, this still leaves the goal post wide open for a potential surprise when the golden trophy is lifted on July 15th.</li></ul><h2>World Cup Groups and Growth Statistics:</h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/055/106/original/WC%20-%20Table%20-%2018-06-14.PNG?1528948160" class="editor-image img-responsive" data-smartkarma-image-id="55106"></figure>

What if World Cup teams competed on the basis of economic growth? We answer this question by using a factor-based model that takes into account growth "consistency and momentum", "stamina", "surprise potential" and "visibility". Using this data set, we generate a ranking of the most "growth-competitive" World Cup teams. We overlaid our findings on the World Cup 2018 bracket and simulated matches - with interesting results.We hope you enjoy this unconventional - hopefully informative - insight piece as much as we did crunching the numbers. Good luck with your World Cup bracket ... and with global macro markets.Highlights:In our tournament, Serbia comes out on top, followed by Switzerland, Australia and Russia. Egypt, Nigeria, Tunisia and Japan also earn spots in the Quarterfinals.Some trade ideas inspired by our analysis of "growth competitiveness" include going long Serbia external debt, Australian Dollar (vs USD or CNH), domestic- and consumption-focused Russian equities and (potentially) the Swiss Franc (vs EUR once ECB QE exit is underway).At the bottom of the pack are England, Sweden and Mexico. Poor growth profiles here bias us to short their respective currencies: GBP, SEK (vs NOK) and MXN (vs CAD).In a fantasy scenario that includes the US, China, India and Italy, the US would easily make it to the Round of 16. India has a shot, but its advance would depend on its draw, while China and Italy are likely to be knocked out in the Group Stage.Not surprisingly, there is no significant relationship between "growth competitiveness" and the FIFA/Coca-Cola World Ranking and bookmaker odds. But with consensus favorites - Brazil, Germany and Spain - collectively having a 60% chance of victory, this still leaves the goal post wide open for a potential surprise when the golden trophy is lifted on July 15th.World Cup Groups and Growth Statistics:

Our guide to this week’s global macro risk events and trading opportunities.<ul class="">
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This week in trade ideas: Go strategic long Norwegian Krone vs EUR and Saudi stocks. Stay short Italian stocks and bonds vs Stoxx 600 and Bunds. Consider fading Trump steel tariff news via relative value short US steel names vs Japanese peers. Stay strategic short Swedish Krona vs EUR. We stay constructive on JPY.</li>
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Monday: Markets digest Italy vote/Germany SPD referendum, Trump tariffs on steel. Also: Australia MI CPI…</li>
</ul>

Our guide to this week’s global macro risk events and trading opportunities.

This week in trade ideas: Go strategic long Norwegian Krone vs EUR and Saudi stocks. Stay short Italian stocks and bonds vs Stoxx 600 and Bunds. Consider fading Trump steel tariff news via relative value short US steel names vs Japanese peers. Stay strategic short Swedish Krona vs EUR. We stay constructive on JPY.

Monday: Markets digest Italy vote/Germany SPD referendum, Trump tariffs on steel. Also: Australia MI CPI…


Week Ahead in Global Macro: US NFP, Tariffs, ECB, BOJ, RBA, China NPC/CPI/Trade, BOC, BNM

Norway

The Norwegian krone is the official currency of the Kingdom of Norway.  The US dollar is the official currency of the United States of America.

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World Cup of Economic Growth

What if World Cup teams competed on the basis of economic growth? We answer this question by using a factor-based model that takes into account...

Virgil Fernandez Esguerra

Week Ahead in Global Macro: US NFP, Tariffs, ECB, BOJ, RBA, China NPC/CPI/Trade, BOC, BNM

Our guide to this week’s global macro risk events and trading opportunities. This week in trade ideas: Go strategic long Norwegian Krone vs EUR...

Virgil Fernandez Esguerra

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