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>US Treasury liquidity conditions remain weak and the turmoil in Treasuries during the third quarter of 2023 probably played a major role in the Powell pivot in December in hindsight.</li><li>There are signs of increasing liquidity stress in US Treasury markets again, but how is that possible during a regime of increasing bank reserves (USD liquidity).</li><li>It all has to do with the mechanics of leverage ratios in regulation.</li></ul>

US Treasury liquidity conditions remain weak and the turmoil in Treasuries during the third quarter of 2023 probably played a major role in the Powell pivot in December in hindsight.There are signs of increasing liquidity stress in US Treasury markets again, but how is that possible during a regime of increasing bank reserves (USD liquidity).It all has to do with the mechanics of leverage ratios in regulation.

USD Liquidity Watch: Treasury Selling Due to Bank Reserves Influx?

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Macroeconomics

<ul>
<li>Here we are checking our thesis on the bond markets we reconfirmed as bullish back in September.</li>
<li>Declining inflation, as indicated by the November US Personal Consumption Expenditure (PCE) deflator, could lead to the 2% inflation target in 2024</li>
<li>A rate cut and a peak of a rate hike cycle plots a scenario where  fixed rate bonds will be the asset class of choice in 2024.</li>
</ul>


Here we are checking our thesis on the bond markets we reconfirmed as bullish back in September.
Declining inflation, as indicated by the November US Personal Consumption Expenditure (PCE) deflator, could lead to the 2% inflation target in 2024
A rate cut and a peak of a rate hike cycle plots a scenario where  fixed rate bonds will be the asset class of choice in 2024.


Bond Market Monitor: Time to Invest in EM Bonds

<ul><li>USD markets felt almost EM like for a couple of hours after Jay Powell and the committee allowed markets to chase the cutting narrative by communicating three expected cuts in the dot plot for 2024.</li><li>I am not always convinced that the dot plot is a wise guidance tool as policy makers likely judge that a dot signaling three cuts relative to market pricing (ahead of the meeting) hinting of more than four cuts net/net should lead to a hawkish surprise.</li><li>The opposite of course happened since narrative chasers in markets rather look at the sequential move than the nominal forecast.</li></ul>

USD markets felt almost EM like for a couple of hours after Jay Powell and the committee allowed markets to chase the cutting narrative by communicating three expected cuts in the dot plot for 2024.I am not always convinced that the dot plot is a wise guidance tool as policy makers likely judge that a dot signaling three cuts relative to market pricing (ahead of the meeting) hinting of more than four cuts net/net should lead to a hawkish surprise.The opposite of course happened since narrative chasers in markets rather look at the sequential move than the nominal forecast.

Central Bank Review: Powell, a Genius or a Madman? 2024 Looks like a Year of Fat Tails

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

<ul>
<li>Our estimate of the fair value 10-year US Treasury yield currently stands at 4.63%.</li>
<li>With a difference of 38 basis points, the gap between the fair value estimate and the actual yield is historically large.</li>
<li>Hence, we adjust our portfolio and remove the overweight in Treasuries.</li>
</ul>


Our estimate of the fair value 10-year US Treasury yield currently stands at 4.63%.
With a difference of 38 basis points, the gap between the fair value estimate and the actual yield is historically large.
Hence, we adjust our portfolio and remove the overweight in Treasuries.


Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


<ul>
<li>Global Liquidity, the main driver of World asset markets, will head much lower </li>
<li>World Central Bank Liquidity slated to contract by 10-20% over next 2 years</li>
<li>Bond markets are already screaming a warning with 'death-cross' formation</li>
</ul>


Global Liquidity, the main driver of World asset markets, will head much lower 
World Central Bank Liquidity slated to contract by 10-20% over next 2 years
Bond markets are already screaming a warning with 'death-cross' formation


United Kingdom

SPDR Barclays U.S. Treasury Bond UCITS ETF is an open ended, UCITS compliant exchange traded fund, domiciled in Ireland. The Fund's objective is to track the performance of the US Treasury bond market as represented by the Bloomberg Barclays US Treasury Index. The Fund invests in physical securities included in the index.

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Spdr Us Treasury (TRSY LN)

USD Liquidity Watch: Treasury Selling Due to Bank Reserves Influx?

There are signs of increasing liquidity stress in US Treasury markets again, but how is that possible during a regime of increasing bank reserves...

Steno Research

Bond Market Monitor: Time to Invest in EM Bonds

We believe the US could hit recession next year. Rate cuts and a peak of a rate hike cycle plots a scenario where fixed rate bonds will be the...

Bondcritic

Central Bank Review: Powell, a Genius or a Madman? 2024 Looks like a Year of Fat Tails

We reiterate that the steepener trade is the best risk/reward in Macro space accordingly as it likes both (fat) tail scenarios.

Steno Research

Bond Investors Are Overdoing It!

It was fun while it lasted. The gap between our fair value 10-year US Treasury yield and the actual yield has grown historically large. Hence, we...

Jeroen Blokland

Alert: Do Bears Hunt in Packs? (Part 2)

Following Part 1 we dive-deeper into the bear case. The collapse in Central Bank liquidity and the warnings already signaled by bond markets spell...

Michael J. Howell

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