Head of Research, Steno Research

Emil Moller

Head of Research

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>Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from the BLS swiftly dispelled any lingering dovish sentiment that had survived the recent NFP announcement.</li>
<li>We’ve analyzed both the CPI data (see here) and the current labor market in detail (see here), and although there are signs of cooling, it’s difficult to counter the recent adjustments in the OIS curve.</li>
<li>This suggests that USD assets remain the focal point, and for the foreseeable future, EM macro strategies should lean towards spread/receiving rather than expecting an NVDA-like bull run in equities</li>
</ul>


Just as the markets were speculating about which spring month would see the first Fed rate cut of the cycle, a surprisingly high CPI report from the BLS swiftly dispelled any lingering dovish sentiment that had survived the recent NFP announcement.
We’ve analyzed both the CPI data (see here) and the current labor market in detail (see here), and although there are signs of cooling, it’s difficult to counter the recent adjustments in the OIS curve.
This suggests that USD assets remain the focal point, and for the foreseeable future, EM macro strategies should lean towards spread/receiving rather than expecting an NVDA-like bull run in equities


<ul><li>Hello everyone and welcome back to yet another assessment of our macro book- and as per usual accompanied by our current macro outlook!We knock on the door to a week with yet another US CPI release- this time revised:The revision we received today proved not to be the unpleasant surprise everyone feared given the 2023 revision and Waller &amp; Powell both having flagged it and as a result, our expectations of a soft print remain unchanged- for elaboration see here.</li><li>While it might feel like we’re repeating ourselves, our belief in the USD and US risk assets being the best options out there hasn’t budged.</li><li>That said, we’ve been tossing around a few ideas and topics internally over the last week: Markets haven’t continued the dramatic price movements since last Friday’s (some might label it as “fake”, see here) NFP blowout, but it’s noteworthy that short-term expectations are significantly outstripping those further along the curve.</li></ul>

Hello everyone and welcome back to yet another assessment of our macro book- and as per usual accompanied by our current macro outlook!We knock on the door to a week with yet another US CPI release- this time revised:The revision we received today proved not to be the unpleasant surprise everyone feared given the 2023 revision and Waller &amp; Powell both having flagged it and as a result, our expectations of a soft print remain unchanged- for elaboration see here.While it might feel like we’re repeating ourselves, our belief in the USD and US risk assets being the best options out there hasn’t budged.That said, we’ve been tossing around a few ideas and topics internally over the last week: Markets haven’t continued the dramatic price movements since last Friday’s (some might label it as “fake”, see here) NFP blowout, but it’s noteworthy that short-term expectations are significantly outstripping those further along the curve.

<ul><li>Main takeaways:We ponder whether the influx of migrants is crucial for the U.S. labor market to maintain its current momentum, especially as employment among native-born workers appears stagnant.</li><li>The surge in part-time employment and the increase in individuals holding multiple jobs likely indicate that workers are clocking fewer hours, which in turn erodes their actual earnings and, consequently, their spending power.</li><li>The ongoing political conflict surrounding immigration could significantly, albeit with some delay, affect both the labor and financial markets.</li></ul>

Main takeaways:We ponder whether the influx of migrants is crucial for the U.S. labor market to maintain its current momentum, especially as employment among native-born workers appears stagnant.The surge in part-time employment and the increase in individuals holding multiple jobs likely indicate that workers are clocking fewer hours, which in turn erodes their actual earnings and, consequently, their spending power.The ongoing political conflict surrounding immigration could significantly, albeit with some delay, affect both the labor and financial markets.

Labour Watch: Why you should pay attention to the Border

Cross Asset Strategy

<ul>
<li>
<p>Last week was far from boring, but just when I thought we’d hit calm waters last Friday, the CBRT had me on edge. Another Governor jumping ship, signaling a return to Erdoganomics? Thankfully, no.</p>
</li>
<li>
<p>Surprisingly, the markets remained pretty chill, considering everything. Maybe the prepared statement did its job in calming nerves. But it was the quick and ready appointment of Karahan that really threw water on any doubts about the future of the disinflation effort.</p>
</li>
<li>The latest leaks from the infamous anonymous sources in the know unveil that disagreements about the policy path were essentially Erkan’s undoing (see <a href="https://www.bloomberg.com/news/articles/2024-02-07/what-triggered-turkish-central-bank-governor-erkan-s-exit?srnd=premium-europe" target="_blank" rel="noopener">here</a>) and perhaps that is why many observers are growing even more optimistic about Turkey</li>
</ul>



Last week was far from boring, but just when I thought we’d hit calm waters last Friday, the CBRT had me on edge. Another Governor jumping ship, signaling a return to Erdoganomics? Thankfully, no.


Surprisingly, the markets remained pretty chill, considering everything. Maybe the prepared statement did its job in calming nerves. But it was the quick and ready appointment of Karahan that really threw water on any doubts about the future of the disinflation effort.

The latest leaks from the infamous anonymous sources in the know unveil that disagreements about the policy path were essentially Erkan’s undoing (see here) and perhaps that is why many observers are growing even more optimistic about Turkey


EM by EM #42 China Could Do with a Cold Turkey

<ul><li>The Yellen Put is still alive while Powell is tied to his (premature) December pivot.</li><li>We find it likely that volatility will pick up as markets are increasingly confused about the trajectory.</li><li>No bets, only hedges vs the US remains our conviction mantra–  We remain long the USD, implicitly betting on higher USD rates in the 5yr sector (versus peers) and long select commodities thriving in a cyclical rebound,</li></ul>

The Yellen Put is still alive while Powell is tied to his (premature) December pivot.We find it likely that volatility will pick up as markets are increasingly confused about the trajectory.No bets, only hedges vs the US remains our conviction mantra–  We remain long the USD, implicitly betting on higher USD rates in the 5yr sector (versus peers) and long select commodities thriving in a cyclical rebound,

Head of Research at Steno Research and former US family office trader with a background in Economics