Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Macroeconomics

Despite concerns of excessive fiscal stimulus, observers are resigned to the Fed allowing the economy to "run hot" in its aftermath without any monetary offset. Investors need to remember Fed policy is data dependent and that there is still sufficient economic slack to assist the riskier segments of the capital structure before any tightening measures are undertaken.
Structural headwinds have offset cyclical  forces to prevent rising US inflation in recent years, but it is still uncertain whether these restraints can counter sustained Modern Monetary Theory (MMT) by the Fed and US Treasury. Future trends in the velocity of circulation of money will determine whether expansion of monetary aggregates translates into rising prices. Japan provided the Fed with an example where significant and sustained economic stimulus did not produce inflation due to arrival of deflationary psychology. 
The recent behaviour of inflationary expectations has defied predictions, which, in turn, were based on historic perceptions of slow declines and rapid increases. Inflationary expectations failed to rise materially during the two most recent economic expansions, thereby indicating the arrival of stubborn deflationary psychology that also fundamentally altered the relationship between equity prices and bond yields.  The current rise in US Treasury yields does not constitute a full-blown repeat of the 2013 taper tantrum. 
<div>The Federal Open Market Committee (FOMC) announced that socially inclusive metrics will form part of their framework for assessing labour market conditions, raising the prospect of policy being kept looser for longer if inflation remains benign. Incoming economic data in 2021 H2 will crucial for investors in determining whether the Fed will be forced to change their expected dovish policy path in 2022.  </div>

Despite concerns of excessive fiscal stimulus, observers are resigned to the Fed allowing the economy to "run hot" in its aftermath without any monetary offset. Investors need to remember Fed policy is data dependent and that there is still sufficient economic slack to assist the riskier segments of the capital structure before any tightening measures are undertaken.
Structural headwinds have offset cyclical  forces to prevent rising US inflation in recent years, but it is still uncertain whether these restraints can counter sustained Modern Monetary Theory (MMT) by the Fed and US Treasury. Future trends in the velocity of circulation of money will determine whether expansion of monetary aggregates translates into rising prices. Japan provided the Fed with an example where significant and sustained economic stimulus did not produce inflation due to arrival of deflationary psychology. 
The recent behaviour of inflationary expectations has defied predictions, which, in turn, were based on historic perceptions of slow declines and rapid increases. Inflationary expectations failed to rise materially during the two most recent economic expansions, thereby indicating the arrival of stubborn deflationary psychology that also fundamentally altered the relationship between equity prices and bond yields.  The current rise in US Treasury yields does not constitute a full-blown repeat of the 2013 taper tantrum. 
The Federal Open Market Committee (FOMC) announced that socially inclusive metrics will form part of their framework for assessing labour market conditions, raising the prospect of policy being kept looser for longer if inflation remains benign. Incoming economic data in 2021 H2 will crucial for investors in determining whether the Fed will be forced to change their expected dovish policy path in 2022.  

Outlook for US Treasuries and Fed Policy: Beware the Lingering Legacies of Deflationary Psychology

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

We called for covering short exposure and putting on risk in our bull group near SPX 3,800 support (hit 3,804.75) and did see a nice bull reversal in NY to short up the bull case off of SPX wedge support. The risk buckle came within the Feb 21 window. We now need to clear hurdle resistance levels to avert a downside re test.This insight focuses on upside resistances to clear to open the way to a new highs and supports to hold to validate the SPX bull reversal off of primary wedge support. Our bull group is where we added risk and outline where we want to add risk in Asia.

We called for covering short exposure and putting on risk in our bull group near SPX 3,800 support (hit 3,804.75) and did see a nice bull reversal in NY to short up the bull case off of SPX wedge support. The risk buckle came within the Feb 21 window. We now need to clear hurdle resistance levels to avert a downside re test.This insight focuses on upside resistances to clear to open the way to a new highs and supports to hold to validate the SPX bull reversal off of primary wedge support. Our bull group is where we added risk and outline where we want to add risk in Asia.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

As the S&amp;P 500 pulls back to logical support at 3870, our weight-of-the-evidence approach continues to support our overall bullish outlook. While the positives heavily outweigh the negatives, the rising 10-year Treasury yield is threatening to become a headwind. In today’s report we highlight attractive Groups and stocks within Materials and Transportation.

As the S&amp;P 500 pulls back to logical support at 3870, our weight-of-the-evidence approach continues to support our overall bullish outlook. While the positives heavily outweigh the negatives, the rising 10-year Treasury yield is threatening to become a headwind. In today’s report we highlight attractive Groups and stocks within Materials and Transportation.

S&P 500 Testing 3870 Support; 10-Year Yield In Focus

SPX 3,950-66 top of wedge call to sell down risk and put on some protection for a test on SPX 3,800 buy support with 3,890 the near trigger support to break, if it holds then adjust for a bounce. SPX 4,000 is our next upside target with upgrade potential (from a low near 3,800). Sub 3,800 would induce a harder pullback.

SPX 3,950-66 top of wedge call to sell down risk and put on some protection for a test on SPX 3,800 buy support with 3,890 the near trigger support to break, if it holds then adjust for a bounce. SPX 4,000 is our next upside target with upgrade potential (from a low near 3,800). Sub 3,800 would induce a harder pullback.

Cross Asset Strategy

The magnitude of anticipated borrowing by the US Treasury in H1 has been dramatically reduced compared to estimates released in November, partly due to the looming expiration of legislation that suspended the debt ceiling in 2019. Currently, the Treasury's cash balance is forecast to fall by $1.5 trillion by the end of June, thereby imparting significant consequences for the level of reserves in the banking system and, consequently, financial market conditions.
Despite the continuation of uncertainty about the magnitude of supplementary fiscal stimulus, continued quantitative easing by the Fed and a lower Treasury cash balance will be supportive for risky assets. The aggressive expansion of the Fed's balance sheet in the aftermath of the arrival of the COVID-19 pandemic was able to offset large Treasury borrowing demands, thereby helping to support easy financial conditions and, therefore, US equities.
The arrival of quantitative easing heralded the onset of a new era, whereby reserve and deposit growth both consistently outstrip loans. Given the likelihood of extremely large increase in reserves, banks could become an even more important source of demand for Treasury securities, an outcome that could potentially create problems for the Fed if the risk of portfolio losses on bond holdings rises significantly.
Continued strong demand for Treasuries from banks will suppress the term premium embedded in yields, thereby boosting financial accommodation. Potentially lower capital buffers after 31 March could temporarily impact banks' ability to expand deposits and repo financing.

The magnitude of anticipated borrowing by the US Treasury in H1 has been dramatically reduced compared to estimates released in November, partly due to the looming expiration of legislation that suspended the debt ceiling in 2019. Currently, the Treasury's cash balance is forecast to fall by $1.5 trillion by the end of June, thereby imparting significant consequences for the level of reserves in the banking system and, consequently, financial market conditions.
Despite the continuation of uncertainty about the magnitude of supplementary fiscal stimulus, continued quantitative easing by the Fed and a lower Treasury cash balance will be supportive for risky assets. The aggressive expansion of the Fed's balance sheet in the aftermath of the arrival of the COVID-19 pandemic was able to offset large Treasury borrowing demands, thereby helping to support easy financial conditions and, therefore, US equities.
The arrival of quantitative easing heralded the onset of a new era, whereby reserve and deposit growth both consistently outstrip loans. Given the likelihood of extremely large increase in reserves, banks could become an even more important source of demand for Treasury securities, an outcome that could potentially create problems for the Fed if the risk of portfolio losses on bond holdings rises significantly.
Continued strong demand for Treasuries from banks will suppress the term premium embedded in yields, thereby boosting financial accommodation. Potentially lower capital buffers after 31 March could temporarily impact banks' ability to expand deposits and repo financing.  

Dramatically Rising US Bank Liquidity in 2021: Supportive for Treasuries and Risky Assets

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

Outlook for US Treasuries and Fed Policy: Beware the Lingering Legacies of Deflationary Psychology

Prospects of further fiscal stimulus have stoked investors' inflation fears as the Fed exhibits no interest in providing monetary offsets. Recent...

DeSaque Macro Research

SPX Hit 3,800 Long Risk Support

We called for covering short exposure and putting on risk in our bull group near SPX 3,800 support (hit 3,804.75) for the bull case from SPX wedge...

Thomas Schroeder

S&P 500 Testing 3870 Support; 10-Year Yield In Focus

As the S&P 500 pulls back to logical support at 3870. In today’s report we highlight attractive Groups and stocks within Materials and Transportation.

Vermilion Research

SPX 3,800 Long Support

SPX 3,950-66 top of wedge call to sell down risk and put on some protection for a test on SPX 3,800 buy support with 3,890 the near trigger support...

Thomas Schroeder

Dramatically Rising US Bank Liquidity in 2021: Supportive for Treasuries and Risky Assets

The US Treasury's cash balance will drop sharply in H1, boosting bank reserves. Thus, cash at US banks will rise significantly in 2021, thereby...

DeSaque Macro Research