Daily Brief Macro: Steno Signals #99 – Freddie Mac gearing up to unleash trillions for consumption? and more

• Last week we learned that the so-called “excess savings pool” from the pandemic had vanished into thin air in the US, or rather that personal savings have been running sub-trend long enough to bring savings back to a normalized state.
• This does not mean that US households have run out of savings, it merely means that savings rates are running below trend, which is not out of the ordinary during late-cycle economies.
• We have recreated the study on German numbers and found much less “alarming” trends in German households, which goes to show that the methodology developed by the San Fran Fed ought to be taken with a pinch, if not even a truckload, of salt.

• The period of easy US monetary policy after the global financial crisis did not produce excessive private investment in the real economy, while financial markets became the major beneficiaries.
• US productivity growth has persistently struggled to replicate the impressive performance witnessed during the late-1990s, thereby forcing companies to raise selling prices in the post-pandemic environment to preserve operating margins. 
• The recent stalling of the US disinflationary process may reflect the continuation of disappointing productivity growth as firms continue are still relying on price rise to preserve profit margins. 

• Welcome to the weekly “The week at a glance” publication where we look at the key figures during the week ahead and how to trade them.
• We have already been banging the drum on the upside risks to the US CPI, but the risk picture is also tilted in a hawkish direction for GBP and SEK rates over the next week.
• Meanwhile, we expect China to surprise negatively, which once again puts the spotlight on the USD/CNY fixing.

• Investors Flock Back Into Commodity Funds Investors are increasingly flocking to commodity funds again.
• A net €353 million flowed into funds from the Morningstar Broad Basket Commodities category in Europe in April.
• This was by far the best month for the category in over two years.

• The past week saw insights on GoTo Gojek Tokopedia (GOTO IJ), Sido Muncul (SIDO IJ), Great Eastern Holdings (GE SP), Singapore Airlines (SIA SP), and Lippo Malls Indonesia Retail Trust.
• There were also macro insights on Malaysia, the Philippines, and Singapore, and the latest CrossASEAN Ground Zero insight on the digital economy and other ASEAN themes. 
• 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 Southeast Asia.

• Donald Trump may return to the White House in 2025 with a potentially damaging agenda for Europe.
• This agenda could have significant economic and political implications for Europe.
• Europeans are advised to pay closer attention to Trump’s speeches and take his words seriously.

• Bloomberg Audio Studios podcasts offer news and analysis on various topics
• Discussion on FOMC presser and Fed’s reaction to inflation and interest rates
• Impact of US economy on global markets and the role of central banks explained by strategist Victor Schwetz

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• India’s CPI inflation in April 2024 was 4.83% y-o-y, consistent with expectations and the previous month’s rate.
• This rate represents the lowest inflation since May 2023.
• The current inflation rate is below both the one-year average and long-run average, potentially impacting economic policies and decisions.

• Indonesia’s 5.1% growth in 1Q24 was underpinned by a larger contribution by public expenditures due to election financing and state-led capital projects
• Net exports, however, entered contraction as the economy’s reliance on commodities and China as an export market start to take their toll. 
• Even if headline growth remains stable for the year, the downside risks from a muted trade outlook and domestic policy uncertainty warrant caution. 

• Asian exports have become more concentrated in the past decade, both in terms of a narrower set of export partners, as well as lower levels of diversification of export products. 
• While some of this concentration is driven by benign factors, reduced trade diversification comes with key risks that have become more salient in the current geopolitical environment. 
• Government strategies in the region are underway to remedy some of the downsides, and this will be a key component in the broader trend of supply-chain realignments in the region.