In today’s briefing:
- New Release: Fund Positioning Chart Pack
- Policy Rate Reversal Warnings
- USD inflation preview: NO, inflation is not going away folks..
- Sweden Policy Rate 3.75% (consensus 3.75%) in May-24
New Release: Fund Positioning Chart Pack
- Q1 Performance Analysis for active Global EM funds. Country/Sector/Stock Positioning relative to benchmark for Global funds
- Spotlight on Indonesia activity among Asia Ex-Japan investors. Sector Dispersion in USA funds
- Extreme Stock Positioning in UK Small/Midcap funds. Ownership Trends in the Financials sector among MSCI China funds.
Policy Rate Reversal Warnings
- Rate hikes are unlikely to resume unless forthcoming cuts prove premature. Cutting outside recessionary regimes has historically been prone to reversals to higher peaks.
- 1998’s cuts followed a shock that failed to prove recessionary. Fed cuts in 1967 sowed the seeds of a severe inflation problem. Both cutting cycles were more than reversed.
- Independent ECB hikes in 2008 and 2012 were rapidly proven policy mistakes. The BoE’s single 2005 cut was also wrong. Hopes that 2024 is benignly like 1989 may be misplaced.
USD inflation preview: NO, inflation is not going away folks..
- The monthly inflation reports have proven to be the catalysts for the repricing of USD rates in recent months and we fear another 1-2 sigma event next week.
- Our calibrated nowcasts have settled on the hottest inflation forecast in town, which will likely prove to be a shocker now that USD duration bets are back in fashion.
- Our nowcasts hint at 0.45% MoM headline inflation and 0.38% MoM core inflation, which is well above consensus at 0.3% MoM for both (see full details in chart 7)The uniformity in the early consensus numbers is striking with right about every analyst on earth expecting a 0.3% MoM print, which has oddly turned into the mechanical monthly forecast every single month.
Sweden Policy Rate 3.75% (consensus 3.75%) in May-24
- The Riksbank reduced the policy rate to 3.75%, motivated by inflation nearing the target amid a weakening economic outlook, with indications of further rate cuts if the favourable inflation outlook persists.
- Based on ongoing economic evaluations, future interest rate decisions will be cautiously managed, with potential additional rate reductions contingent on sustained positive inflation trends and economic stability.
- The central bank remains cautious about inflation risks related to external economic factors and the krona’s volatility, ensuring a responsive and flexible monetary policy to navigate potential economic fluctuations effectively.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
