Macro

In today’s briefing:

Japan Watch: The pros and cons for Ueda
US Equities Outlook: Time for a Reality Check
A Key US Macro Indicator Rose the Most Since Covid but Still Points to 20% Downside in Equities
EM by EM #14 7 EM Charts for the “Central bank Bonanza”
The Week That Was in ASEAN@Smartkarma – Ace Hardware’s Spike, Erajaya’s Ramp-Up, and Leader Energy
Wheat explodes after Russia threatens to attack grain shipments // Dollar-Commodities Divergence
Sterling U-Turn

Japan Watch: The pros and cons for Ueda

The JPY market is one big roller-coaster at the moment as the market constantly tries to sniff out potential clues on when the Bank of Japan will catch up to the rest of the G10 central banks with a tighter policy.
In this piece, we look at the pros and cons of moving already this Friday for the Bank of Japan, but let’s take a look at the current back-drop before we move to the actual policy decision.
Markets started pricing in an elevated risk of a further increase to the yield-curve-control cap on Friday after a spike in wage data three weeks ago.

US Equities Outlook: Time for a Reality Check

By Said Desaque

Easy comparisons contributed to lower US inflation in 2023 H1, but the backdrop in H2 is less favourable, thereby making the Fed wary of premature dovish policy pivots.
Economic soft-landings have never been good for corporate profits, thereby helping to explain why analysts have set such a low bar for the 2023 Q2 reporting season.
Glaring inconsistencies are embedded in the 2024 outlooks for corporate profits and Fed policy, notably resource utilisation in the US economy remains too elevated to quickly cull inflation pressures.

A Key US Macro Indicator Rose the Most Since Covid but Still Points to 20% Downside in Equities

The US Truck Tonnage Index (TTI) ‘explains’ 95% of the level of US GDP. After a substantial increase in June, the TTI does not point to an immediate US recession.
Given its robust relationship with US stock markets, we derive ‘fair value’ estimates for the Dow Jones Transportation and S&P 500 Index, revealing ample downside for both indices.
In addition, a simple TTI-based investment strategy using these fair value estimates results in a superior Sharpe ratio, explained by higher returns and lower risk.

EM by EM #14 7 EM Charts for the “Central bank Bonanza”

Main takeaways:We don’t like assets overly sensitive to USD strength The Carry currencies will start to lose tailwinds soonStill plenty of cheap opportunities in pockets of EM- we will likely add trades here in the coming days on our live Portfolio, see hereRead below for our overall perspective on EM’s in this week’s Central Bank BonanzaEurozone numbers keep going from bad to worst and funds keep stagging to their USD bear bets.
Despite having burned our fingers on the timing we still think that markets will be in for quite an awakening in this space as the recessionary data keeps coming in.
After the horrendous PMI prints in Germany in particular its perhaps worth zooming out into the bigger picture here:Chart 1: PMIs across the worldFirstly it is evident that a slowdown is occurring, particularly in the manufacturing sector, and there are indications that this trend is gradually affecting the services sector as well, especially in developed countries.

The Week That Was in ASEAN@Smartkarma – Ace Hardware’s Spike, Erajaya’s Ramp-Up, and Leader Energy

By Angus Mackintosh

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The past week saw insights on Ace Hardware Indonesia (ACES IJ), after some strong SSSG, Erajaya Swasembada (ERAA IJ)post a management call, Leader Energy Holdings ahead of its IPO.
There were also insights on Gamuda Bhd (GAM MK), eFishery in Indonesia, Astro Malaysia Holdings (ASTRO MK), Eco World Development (ECW MK), and Genting Bhd (GENT MK).

Wheat explodes after Russia threatens to attack grain shipments // Dollar-Commodities Divergence

By The Commodity Report

Wheat futures soared as much as 9%, the biggest jump since 2012, as Russia threatened ships sailing to Ukrainian ports, escalating a conflict over exports from the key Black Sea region.
Russia’s defense ministry said that all ships headed to the ports from Thursday will be considered as potentially carrying military cargo.
It also said flag countries of vessels sailing to Ukraine will be considered as on Kyiv’s side in the conflict.

Sterling U-Turn

By Untying The Gordian Knot

The YoY inflation rate in the UK increased by 7.9%, which was better than the expected 8.2%.
There has been some overreaction due to positioning, leading to impulse moves in UK rates, Yield Curve, EURGP and GBPUSD.
The GBPUSD has experienced an impulse drop, but it awaits signals of a trend reversal.

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Jul 24

Daily Brief Macro: A New Cyclical Bull? and more

In today’s briefing:

A New Cyclical Bull?
The Risks to the Disinflation and Soft-Landing Bull
Steno Signals #58 – Rebound or recession? Or both?

A New Cyclical Bull?

Technical buy signals are coming out of the woodwork, supported by strong price momentum and signs of broadening market breadth. Is this the start of a new cyclical bull?
Ultimately, the bull and bear decision amounts to a judgment call on regime change.
Is the economy emerging out of recession or is there a slowdown waiting around the corner to sideswipe stock prices and market expectations?

The Risks to the Disinflation and Soft-Landing Bull

Nothing in investing is easy. While the disinflation and soft-landing narrative is the dominant one, sentiment could change very quickly.
While we aren’t necessarily dismissing the bullish implications of the disinflation and soft-landing scenario, investors should be aware of the risks.
Consider the implications of catastrophic success, the last-mile inflation problem and the risk of a recession.

Steno Signals #58 – Rebound or recession? Or both?

We have spent the last week studying the business cycle intensively to gauge how various asset classes look at the cycle right now.
It is safe to say that nothing has been normal in this post-Covid “cycle” and that is probably exactly the reason why we are currently stuck in a debate on whether the economy rebounds or goes into a recession.
Let’s have a look at the evidence.

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Jul 23

Daily Brief Macro: The Weekly Market Monitor (29) – The Moment of Truth? and more

In today’s briefing:

The Weekly Market Monitor (29) – The Moment of Truth?
Block Deals Pre-Disclosure Rule Changes in Korea Likely to Be Implemented Around October 2023
Positioning Watch – The Goldilocks Scenario is Intensifying

The Weekly Market Monitor (29) – The Moment of Truth?

While early, the comparison to the previous quarter is remarkable. Almost all sectors reported better-than-expected earnings, but the market reaction has been negative in most cases.
Investors are fixated on inflation and the end of the Fed’s tightening cycle. But the strong US labor market means the Fed will want to keep rates higher for longer.
The net percentage of bulls in the survey has risen to nearly 30%, pushing our Fear & Frenzy Sentiment Index further into ‘Frenzy’ territory.

Block Deals Pre-Disclosure Rule Changes in Korea Likely to Be Implemented Around October 2023

By Douglas Kim

As a result of the likely implementation of the changes to the block deal pre-disclosure rules in Korea, numerous block deal sales are likely in the next 2-3 months.
Block deal sales worth 50 billion won or more totaled 5.2 trillion won in 2022. As of 17 July 2023, it was 1.1 trillion won.
We provide shareholding structures of the top 20 stocks in KOSDAQ and a few companies in this list could announce block deal sales in 2H 2023.

Positioning Watch – The Goldilocks Scenario is Intensifying

Happy Saturday everyone, and welcome back to our weekly positioning watch, where we dissect how traders and investors are positioning themselves in the current market.
As with every other rally, retail investors end up blindly following the big players, and long risk might very well be the play to make as flows from ETFs and retail investors continue to lift markets.
And with that in mind, we have spiced up today’s version, moving away from the CFTC report and instead trying to have a look at what various surveys are telling us about the current market.

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Jul 22

Daily Brief Macro: Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US? and more

In today’s briefing:

Out of the Box #12: What if the deacceleration of EZ inflation starts to outpace that of the US?
Equities Watch: Today’s Philly Fed Figures Make For Bullish Reading
CX Daily: Why Temasek Is Steering Clear of China’s Generative AI Stock Frenzy for Now
Commodity Watch – A rebound in the most cyclical asset class?
Portfolio Watch: Timing the Beta Exit

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 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?

Equities Watch: Today’s Philly Fed Figures Make For Bullish Reading

By Ulrik Simmelholt

Welcome to this fourth release in our “Business Cycle Week”, where, besides addressing the just released Philadelphia Fed Manufacturing Survey, we’ll probe the probability for a cyclical rebound and assess the implications for equities in particular.
Take away: Divergence in soft and hard data has scared the outlook for earnings in US industrials the most. Equity betas to soft and hard data show an interesting discrepancy. Long US industrials vs short German industrials look interesting here. 2 reasons for PMI bullishness, 2 reasons for PMI bearishness.
This week has been all about our ‘business cycle week’ here at Steno Research and for this one we’ll zoom in on both soft and hard data from the manufacturing sector and put it into an equity perspective.

CX Daily: Why Temasek Is Steering Clear of China’s Generative AI Stock Frenzy for Now

By Caixin Global

Temasek /: Why Temasek is steering clear of China’s generative AI stock frenzy for now
Kissinger /: Xi praises Kissinger’s ‘historic contribution’ to U.S.-China ties
Private /: China vows to create a ‘bigger, better, and stronger’ private sector

Commodity Watch – A rebound in the most cyclical asset class?

Welcome to the final series of our “Business Cycle Week”, where we cover how a possible rebound in manufacturing might affect asset markets, and if markets are already starting to position for it.
Commodities is the only asset class we need to tick off, and what a way to end the business cycle week with the most cyclical asset of them all, looking to benefit the most from a rebound in manufacturing.
Commodities have had a rough 2022 (and start of 2023) as USD strength and a lack of Chinese demand have held commodities prices down, despite the scarcity that characterizes the market currently.

Portfolio Watch: Timing the Beta Exit

Hello Everyone and welcome back to our weekly Portfolio Watch! Quite an interesting week here leading up to central bank decisions and as per usual we will be all over it.
Goldilocks data keeps coming in but we fear markets may be a bit stretched on risk appetite, and as a result, we have closed our AI FOMO trade today.
Besides getting out of the AI we have entered a Commodity long, taken profits on USDCNY long, and added a UST steepener.

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Jul 21

Daily Brief Macro: A Secret US-China Accord? Will It Boost Global Liquidity? and more

In today’s briefing:

A Secret US-China Accord? Will It Boost Global Liquidity?
TRADE IDEA: Short GBP, Long USD
Trump’s Trade War Revisited: Tariffs Did Reduce China’s Bilateral Surplus with US
Spain Election Watch: Why Spain Is Not the Next Italy
Rates Watch: Will curves bear-steepen if the cyclical rebound is confirmed?
“The 70 Year Itch” For Communist North Korea & Visit to One of Karl Marx’s Favorite Pubs in London
Energy | Jul 20, 2023
What Are Rollups? Everything You Need to Know

A Secret US-China Accord? Will It Boost Global Liquidity?

By Michael J. Howell

Did Treasury Secretary Yellen’s recent trip lead to a US-China Accord that allows the US dollar to weaken and China’s PBoC to ease again?
Markets are acting as if this happened, but in reality this ‘accord’ simply reinforces existing forex and liquidity trends
Emerging Market liquidity is currently high. This is inconsistent with an upcoming recession, but aligns with a rising Global Liquidity cycle. Expect more US and Chinese easing.

TRADE IDEA: Short GBP, Long USD

Unlike US headline inflation UK inflation has ample room to come down in the remainder of the year.
Lackluster GDP growth and headline inflation returning to target requires less tight monetary policy. This means that the gap between UK and US 2-year yields will likely turn negative again.
The Bank of England is the only major central bank for which markets can still price out a considerable number of rate hikes.

Trump’s Trade War Revisited: Tariffs Did Reduce China’s Bilateral Surplus with US

By Prasenjit K. Basu

China’s share of US imports is down to a 16-year low of 15.1% in the year to May’23, from a peak of 21.77% five years ago. Trump’s tariffs worked.
ASEAN was the main loser from China’s market-share gains in the US, and is now (alongwith India) among the major gainers from China’s losses in US market share.
China’s bilateral trade surplus with the US has moderated only slightly, so it remains a live political issue in the US. China is likely to keep losing US market share.

Spain Election Watch: Why Spain Is Not the Next Italy

By Anne Sandager

During the early stages of the COVID-19 pandemic, the EU introduced a recovery fund called the Next Generation EU, aimed at providing financial assistance – through grants and loans – to member states affected by the crisis.
Italy, being one of the countries hit hardest by the pandemic, has received 48 % of the EU recovery fund based on several criteria including timely spending and value-for-money.
The new development is Spain, which after Sunday’s general election looks well-positioned for an Italian-esq ideological turnaround.

Rates Watch: Will curves bear-steepen if the cyclical rebound is confirmed?

Welcome to this second asset-specific piece during our “Business Cycle Week”.
Due to several of our indicators hinting at a short-term pick-up in cyclical activity (manufacturing), we take a look at every single major asset class and how it’s priced relative to the cycle outlook.
In this piece, we will look at rates/curves relative to the cyclical outlook.

“The 70 Year Itch” For Communist North Korea & Visit to One of Karl Marx’s Favorite Pubs in London

By Douglas Kim

In this insight, I discuss the “70 Year Itch” for North Korea communism & a visit to one of Karl Marx’s favorite pubs in London.
On 27 July 2023, it would mark 70 years since the signing of the armistice agreement and the Korean War is technically still in progress.
North Korean nuclear threats could once again be highlighted globally in 2024/2025 as the timing of the US Presidential Election draws near in November 2024.

Energy | Jul 20, 2023

By Untying The Gordian Knot

On May 4, 2023, WTI futures experienced a significant drop of 6.58% before closing with a slight gain of 0.66%.
Creating a bull flag reversal pattern, but prices did not make higher highs or higher lows in the following weeks.
Therefore, a more stable, extended base formation was necessary instead of a quick V-shaped recovery.

What Are Rollups? Everything You Need to Know

By ByteTree Asset Management

Addressing the shortcomings of Ethereum, Layer-2 blockchain scaling platforms continue to gain prominence and popularity in the crypto space.
Powered by Rollup technology, these platforms have brought faster transaction speeds and reduced costs, thereby significantly enhancing the overall Ethereum user experience.
This has led to increased interest and adoption of Layer-2 platforms among developers, as they provide a viable and scalable solution for building applications on the Ethereum network.

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Jul 20

Daily Brief Macro: China: An Accident Waiting to Happen? Comparing the Current Chinese Economy to the One in 2015 and more

In today’s briefing:

China: An Accident Waiting to Happen? Comparing the Current Chinese Economy to the One in 2015
FX Watch: Have FX Markets Sniffed out an Upcoming Rebound?
5 Things We Watch – PMIs, FX, Japan, Brazil, Inflation
Spain Election Watch: Why Spain Is Not the Next Italy
UK: Disinflation Challenges Narratives
CX Daily: China Needs More Than Monetary Stimulus to Bolster Flagging Economy, Analysts Say
EA: HICP Decelerating Toward Target

China: An Accident Waiting to Happen? Comparing the Current Chinese Economy to the One in 2015

Comparable to the China Growth Scare of 2015-2016, the Manufacturing PMI is below 50, imports are falling, and deflation worries are rising.
The real estate crisis is worse than in 2015-2016, with housing prices falling again, floor space under construction declining, consumer confidence near historic lows, and LGFV financing issues increasing.
Unlike 2015 (and 2022), the current depreciation of the Chinese Yuan has not (yet) been accompanied by falling stock prices.

FX Watch: Have FX Markets Sniffed out an Upcoming Rebound?

Welcome to the second research piece in our “Business Cycle Week”.
In this edition of the series on the business cycle, we will focus on whether FX markets sniff out the cycle ahead of other asset markets.
Is the USD a bellwether of global trends or is it just a saying?

5 Things We Watch – PMIs, FX, Japan, Brazil, Inflation

Welcome to this week’s edition of ‘5 Things We Watch’, where we take you through 5 things that we have found particularly interesting in the past week.
Yesterday we launched the first of a couple of articles focusing on the current business cycle, giving our best guess on where in the cycle we are, what markets are pricing in and most importantly – what will happen next.
The full articles regarding the business cycle and how different asset classes are positioned for it will be released throughout the week for premium subscribers.

Spain Election Watch: Why Spain Is Not the Next Italy

By Mikkel Rosenvold

Could a right-wing government in Spain follow in the footsteps of Meloni’s crusade against the EU economic framework?
Tensions are high as we gear up to the all-important general election on Sunday.
We give you the 4 major reasons why you need not worry about Spain becoming the next Italy.

UK: Disinflation Challenges Narratives

By Phil Rush

UK inflation unusually undershot forecasts as the CPI slowed by 73bp to 7.9% in Jun-23. The RPI’s drop to 10.7% matched our relatively low forecast (Consensus 10.9%).
Unlike the EA, downside surprises have been rare in the UK since its peak. The UK’s median and food price inflation impulse now compare favourably.
The BoE’s forceful response looks increasingly disproportionate to the CPI news as this outcome matches its forecast. Nonetheless, a 50bp hike remains likely in August.

CX Daily: China Needs More Than Monetary Stimulus to Bolster Flagging Economy, Analysts Say

By Caixin Global

Rate /: China needs more than monetary stimulus to bolster flagging economy, analysts say
Kissinger /: Kissinger meets China Defense Chief in pursuing closer ties
Consumption /Chart of the Day: China’s consumer spending data show sluggish housing growth

EA: HICP Decelerating Toward Target

By Phil Rush

The final EA HICP inflation print confirmed the 0.6pp slowing to 5.5% in Jun-23, while the ex-tobacco rate precisely matched our 5.49% forecast.
Underlying inflation kept slowing despite the annual rate of “core” (ex-food, energy, tobacco) inflation increasing. It’s not at a target-consistent pace, but it’s getting there.
Another 25bp ECB rate hike on 27 July remains likely, but the 14 September decision is a close call. Further slowing could prevent hikes, discouraging commitment in July.

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Jul 19

Daily Brief Macro: Is China Entering a Balance Sheet Recession? and more

In today’s briefing:

Is China Entering a Balance Sheet Recession?
Can Emerging Asia Benefit from Investment Diversification Away from China?
CX Daily: Dark Arts of Fund Manager in China’s Bond Market Lift Lid on Debt Mess
The Energy Cable #29 – A weak USD paving the way for commodities?
EM by EM #13 – A sweetspot for Brazilian Equities?
US Manufacturing Watch: Indicators point to a cyclical rebound
Nasdaq and S&P Futures

Is China Entering a Balance Sheet Recession?

By Manu Bhaskaran

China’s recent difficulties are drawing unfavourable comparisons with Japan’s struggles in the 1990s. We argue, however, there are key differences that may affect China’s fate.
While it is true that China’s households are deleveraging, this behaviour is not replicated by the corporate sector. Balance sheet repairs are not a widespread phenomenon yet.
Fresh policy support is forthcoming but is unlikely to be sufficient to face the massive challenges looming. More ambitious stimulus and structural reform are needed.

Can Emerging Asia Benefit from Investment Diversification Away from China?

By Manu Bhaskaran

The newly-released UNCTAD World Investment Report provides further evidence that China is no longer the investment magnet it once was.
Greenfield investments have remained admirably resilient in emerging Asia despite the global macroeconomic difficulties, suggesting that growth opportunities remain available.
Investors are taking note of the cyclical and structural difficulties that China is facing and are reallocating their capital elsewhere. Southeast Asian markets stand out as winners.

CX Daily: Dark Arts of Fund Manager in China’s Bond Market Lift Lid on Debt Mess

By Caixin Global

Bonds / Cover Story: Dark arts of fund manager in China’s bond market lift lid on debt mess
GDP /: China’s GDP grew 6.3% in second quarter, missing market expectations
Corruption /: Another ex-chairman of China Everbright Group investigated for suspected corruption

The Energy Cable #29 – A weak USD paving the way for commodities?

Welcome to your weekly maverick energy newsletter from both sides of the pond.
Stars are starting to align for energy as i) the business cycle seems to be holding up better than feared, ii) the USD is weakening and iii) ongoing supply negative news (prolonged Saudi Arabian supply cut and Russia abandoning the grain deal).
Time to go long energy?

EM by EM #13 – A sweetspot for Brazilian Equities?

Main takeaways: Brazilian Equities are on offer and provide solid value for long-only. If commodities are in for a rebound Brazil may be a decent option to seek exposure.
Plenty of recessionary clouds near mid-term and while fixed income remain the game in town, yields coming down may provide a narrow opportunity for equities. Regular EM readers here would know that we have been bullish on Brazilian Sovereigns since March.
The fundamental drivers behind this thesis have roughly been two folded: The market being over-pessimistic of the re-ascension of Lula to the office and over-concerned with the inflationary resilience of the Brazilian Economy.

US Manufacturing Watch: Indicators point to a cyclical rebound

Welcome to this edition of the Watch series where we’ll take a closer look at US manufacturing, see if it can provide some guidance as to where in the business cycle we’re at, and ultimately whether the current momentum across most risk assets can be sustained – or maybe even add further.
This is the first release in our “Cycle Week” where we try to assess where all major asset classes see the cycle heading given the current price action.
We will release pieces on how FX, equities, credit and commodities inter-connects with the current cycle dynamic in the coming days.

Nasdaq and S&P Futures

By Untying The Gordian Knot

The large US banks opened higher on Friday, trading up by 1.5% to 3.7% in the morning session on news of earnings beat by JP Morgan and Wells Fargo.
JP Morgan, Bank of America, Citibank, and Wells Fargo formed a bearish Candlestick pattern despite the earning beat on above-average volume.
In the technology sector, the Semiconductor ETF (SOX), Nvidia, Microsoft, META, Micron Technology, C3 AI, SPDR Technology ETF, and Palantir all had bearish price action and candlestick patterns.

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Jul 18

Daily Brief Macro: This Is a ‘Frenzy’ Market and more

In today’s briefing:

This Is a ‘Frenzy’ Market, and the Rally Should End Now!
The Week That Was in ASEAN@Smartkarma – Alfamart’s Take-Off, Siloam Hospitals, and Cinema XXI IPO.
Japan Watch – Buy the JPY? >150 more likely than
The Great Game – Kerch Bridge on fire!
How Much Do Commodity Prices Rise when Fertilizer Prices Rise?

This Is a ‘Frenzy’ Market, and the Rally Should End Now!

Our Fear & Frenzy Sentiment Index has been in the Frenzy territory for several weeks, indicating at least a temporary pullback in the stock markets. S&P 500 INDEX (SPX INDEX).
The AAII Investor Sentiment Survey, the Equity Put/Call Ratio, the Relative Strength Index (RSI, the SKEW Index, and ETF and Mutual Fund Flows all push the index toward Frenzy.
Together with slower economic momentum globally and pockets of elevated stock market valuation, like US tech stocks, downside looms.

The Week That Was in ASEAN@Smartkarma – Alfamart’s Take-Off, Siloam Hospitals, and Cinema XXI IPO.

By Angus Mackintosh

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The past week saw inisghts on Sumber Alfaria Trijaya, Siloam International Hospitals, Bangkok Chain Hospital, and Bangkok Dusit Medical Services, Cinema XXI IPO, and Vale Indonesia (INCO).
The were also macro insights on the Philippines and Malaysia plus a sector insights on regional plantations, and Indonesian digital banks, and Singapore ESG ratings.

Japan Watch – Buy the JPY? >150 more likely than

The Japanese bubble of low-interest rates and inflation has been a hot topic throughout the whole Fed hiking cycle, as the ultra-loose monetary policy conducted in Japan leaves a textbook-like carry trade in shorting the Yen against basically every other currency with positive interest rates.
With the recent rally in Yen and JGB yields, it might therefore be time to revisit the Asian islands to see if something has structurally changed, or if the Yen will remain the most shorted currency worldwide.
If now is the time to load up on the Japanese currency, it could be one of the greatest trades for every PM and investor out there – as you say, the higher you have to climb, the further you have to fall.

The Great Game – Kerch Bridge on fire!

By Mikkel Rosenvold

On monday morning, the Kerch Bridge between mainland Russia and the Crimea was attacked yet again.
Unlike former attack like the Nordstream strike, there is little doubt as to who did it as the Ukrainians are openly mocking the Russians.
So – why attack the bridge again and what does it tell us about the war?

How Much Do Commodity Prices Rise when Fertilizer Prices Rise?

By The Commodity Report

Global crop production growth will mainly be driven by continued progress in plant breeding and a transition to more intensive production systems.
Yield improvements are projected to account for 79% of global crop production growth, cropland expansion for 15%, and higher cropping intensity for 6% over the outlook period.
Global growth of sugar consumption will be driven entirely by Africa and Asia, with demand projected to surge in areas where the level of per capita intake is currently low.

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Jul 17

Daily Brief Macro: Positioning Watch – Preparing for (dis)inflation? and more

In today’s briefing:

Positioning Watch – Preparing for (dis)inflation?
What Next for US Equity-Bond Yield Correlations? Fiscal & Monetary Policy Conduct Takes Centre Stage
The Soft Landing Vs. Slowdown Debate
Steno Signals #57 – What on earth is going on with the USD?
What to Watch For in a Pivotal Earnings Season

Positioning Watch – Preparing for (dis)inflation?

Welcome back to the weekly Positioning Watch, where we crunch through the positioning data and point out the biggest positioning trends in global markets.
Main takeaway: Bond bears had a significant setback this week following a mild inflation report – and that comes after a substantial surge in yields the previous week.
Now, we eagerly examine the market’s repositioning here in the aftermath of the reversal.

What Next for US Equity-Bond Yield Correlations? Fiscal & Monetary Policy Conduct Takes Centre Stage

By Said Desaque

The correlation between US bond yields and equity prices has shifted over time and has been heavily influenced by changes in the inflationary backdrop and Fed policy credibility.
Bond investors have embraced a secular stagnation thesis for the US economy (low growth and inflation), putting them on collision course with the Fed about the appropriate conduct of policy.
Prospective fiscal policy conduct could have a major impact on the correlation between bond yields and equities as testified by the events of October 1987.

The Soft Landing Vs. Slowdown Debate

Team Soft Landing and Team Slowdown are engaged in a cage match
Incoming data in the coming weeks will decide the winner.
In the short run, the market is overbought and posed for a period of consolidation or correction.

Steno Signals #57 – What on earth is going on with the USD?

Happy Sunday and welcome to our weekly flagship publication “Steno Signals”.
We have had a great week trading-wise except for being stopped out in our EUR/USD shorts and we find the price action in the USD extremely interesting to assess.
Could the moves we see in FX space be a harbinger of an unexpected cyclical rebound?

What to Watch For in a Pivotal Earnings Season

The upcoming Q2 earnings reporting season could be pivotal for investors.
The direction of the economy and the earnings outlook could go either way. There are many questions but no definitive answers.
We offer some signposts to watch for clues to future market direction.

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Jul 16

Daily Brief Macro: Equity Markets – Is Icarus Flying Too Close to the Sun? and more

In today’s briefing:

Equity Markets – Is Icarus Flying Too Close to the Sun?

Equity Markets – Is Icarus Flying Too Close to the Sun?