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>In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action before anyone else has given it any noteworthy attention.</li>
<li>This week we look at the insolvent G10 central banks and how to deal with them.</li>
<li><span style="font-weight: 400;">It is probably not a newsworthy conclusion to central bank aficionados, but the big question is whether it matters and potentially WHEN it matters. </span></li>
</ul>


In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action before anyone else has given it any noteworthy attention.
This week we look at the insolvent G10 central banks and how to deal with them.
It is probably not a newsworthy conclusion to central bank aficionados, but the big question is whether it matters and potentially WHEN it matters. 


Out of the Box: Central Banks Are Insolvent. How Do We Deal with It?

Energy Transition | AI | Shifting World Order, Mint Finance

Pranay Yadav

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

<ul>
<li>Treasury yields have surged over the past 3 months and reached their highest level since 2007 amid a historic bond selloff.</li>
<li>Longer-Duration yields have outperformed in the recent rally due to the effects of higher term premiums.</li>
<li>Higher yields contribute to tightening of financial conditions, making further rate hikes by the Fed less important.</li>
</ul>


Treasury yields have surged over the past 3 months and reached their highest level since 2007 amid a historic bond selloff.
Longer-Duration yields have outperformed in the recent rally due to the effects of higher term premiums.
Higher yields contribute to tightening of financial conditions, making further rate hikes by the Fed less important.


Yield Curve Steepening: Positioning Across the Curve

Head of Research, Steno Research

Emil Moller

Head of Research

<ul><li>The central banks that accurately anticipated the post-inflation wave, or perhaps didn’t underestimate its magnitude, were those in commodity-intensive emerging markets.</li><li>They promptly felt the impact of rising prices on their domestic products.</li><li>We had also predicted that these same emerging markets would be the first to identify the subsequent disinflation wave we’ve observed in 2023.</li></ul>

The central banks that accurately anticipated the post-inflation wave, or perhaps didn’t underestimate its magnitude, were those in commodity-intensive emerging markets.They promptly felt the impact of rising prices on their domestic products.We had also predicted that these same emerging markets would be the first to identify the subsequent disinflation wave we’ve observed in 2023.

Macro Nugget: Fluctuations and the Perception of Gravity

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.

Cross Asset Strategy

<ul>
<li>We examine asset class performance over 1, 2, 3, and 6 months after a 15%+ oil price increase in one month and a 25%+ spike in three months.</li>
<li>Historically, oil price shocks were not detrimental to stocks. Returns were positive for all periods after the shock. More importantly, returns were higher after oil shocks than the ‘normal’ </li>
<li>Gold also outperformed, and interestingly, oil continued to spike, causing additional headaches for central banks. Mainly since spiking oil prices are indeed reflected in higher inflation.</li>
</ul>


We examine asset class performance over 1, 2, 3, and 6 months after a 15%+ oil price increase in one month and a 25%+ spike in three months.
Historically, oil price shocks were not detrimental to stocks. Returns were positive for all periods after the shock. More importantly, returns were higher after oil shocks than the ‘normal’ 
Gold also outperformed, and interestingly, oil continued to spike, causing additional headaches for central banks. Mainly since spiking oil prices are indeed reflected in higher inflation.


Understanding Oil Price Shocks: What to Expect from Asset Class Returns?

<ul><li>Recent developments in components of the inflation basket leave us less convinced of the path ahead for the Fed but judging by funds futures, the market is now pricing in cuts already by April 2024.</li><li>Energy (and oil in particular) could easily wrongfoot these expectations.</li><li>Our estimate is for a deficit just above 2mn barrels through the fourth quarter, which is enough to bring oil prices another 30% higher based on historical data.</li></ul>

Recent developments in components of the inflation basket leave us less convinced of the path ahead for the Fed but judging by funds futures, the market is now pricing in cuts already by April 2024.Energy (and oil in particular) could easily wrongfoot these expectations.Our estimate is for a deficit just above 2mn barrels through the fourth quarter, which is enough to bring oil prices another 30% higher based on historical data.

Asset Allocation Watch: Best not hope for cuts

US 10Y (USGG10YR INDEX)

Out of the Box: Central Banks Are Insolvent. How Do We Deal with It?

In our “out of the box” series, we aim at being ahead of the current consensus narrative and think of the next theme that could drive price action...

Steno Research

Yield Curve Steepening: Positioning Across the Curve

Treasury yields surging to levels unseen since 2007. This paper explores the driving factors behind recent bond selloff, its economic impact, &...

Mint Finance

Macro Nugget: Fluctuations and the Perception of Gravity

The central banks that accurately anticipated the post-inflation wave, or perhaps didn’t underestimate its magnitude, were those in...

Steno Research

Understanding Oil Price Shocks: What to Expect from Asset Class Returns?

Oil price shocks push inflation higher and favor Gold as an asset class, but unlike what many believe, are not bad news for Equities!

Jeroen Blokland

Asset Allocation Watch: Best not hope for cuts

Recent developments in components of the inflation basket leave us less convinced of the path ahead for the Fed but judging by funds futures, the...

Steno Research