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>I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I quickly realized that most PMs in the region agreed on my take on the imminent risk of a devaluation of the CNY.</li>
<li>USD/CNH call options are popular/consensus in the Asian Macro PM space, but interestingly there is no consensus around the contagion from a devaluation of the USDCNY.</li>
<li>The discussions I had pointed in all directions, meaning that a CNY devaluation holds the potential to turn into a macro earthquake, despite it already being a consensus position.</li>
</ul>


I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I quickly realized that most PMs in the region agreed on my take on the imminent risk of a devaluation of the CNY.
USD/CNH call options are popular/consensus in the Asian Macro PM space, but interestingly there is no consensus around the contagion from a devaluation of the USDCNY.
The discussions I had pointed in all directions, meaning that a CNY devaluation holds the potential to turn into a macro earthquake, despite it already being a consensus position.


Steno Signals #97 – 5 reasons why the CNY will be devalued next week and how to trade it

<ul><li>Welcome to our weekly Portfolio Watch! We have had a strong week in our portfolio with a USD-reflationary lean, but we are starting to contemplate how to deal with contagion from a continued rise in USD versus Asian FX pairs, especially if the increasing latent risk of a major devaluation of the CNY comes into fruition.</li><li>There is currently no respite for the Asian FX pairs as all major forward looking models point to a reacceleration of US inflation trends from the current plateau around 3.5% YoY.</li><li>We will look at the devaluation risks in detail tomorrow in our weekly “Steno Signals”, but will pinpoint value pockets in markets already today in our Portfolio Watch.</li></ul>

Welcome to our weekly Portfolio Watch! We have had a strong week in our portfolio with a USD-reflationary lean, but we are starting to contemplate how to deal with contagion from a continued rise in USD versus Asian FX pairs, especially if the increasing latent risk of a major devaluation of the CNY comes into fruition.There is currently no respite for the Asian FX pairs as all major forward looking models point to a reacceleration of US inflation trends from the current plateau around 3.5% YoY.We will look at the devaluation risks in detail tomorrow in our weekly “Steno Signals”, but will pinpoint value pockets in markets already today in our Portfolio Watch.

Portfolio Watch: No respite for Asian FX.. How to deal with it?

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<ul>
<li>The Indonesian rupiah has outperformed most EM currencies, particularly other Asian currencies, and has done so with low volatility in contrast with the rising volatility of the EM FX index.</li>
<li>Looking ahead, headwinds may be appearing with the interest-rate differential working against the currency as the Fed starts raising rates and higher inflation leading to lower real rates.</li>
<li>While the rise in commodity prices is generating trade surpluses for now, the current account may turn negative from positive with a rise in imports accompanying the economy's reopening.</li>
</ul>


The Indonesian rupiah has outperformed most EM currencies, particularly other Asian currencies, and has done so with low volatility in contrast with the rising volatility of the EM FX index.
Looking ahead, headwinds may be appearing with the interest-rate differential working against the currency as the Fed starts raising rates and higher inflation leading to lower real rates.
While the rise in commodity prices is generating trade surpluses for now, the current account may turn negative from positive with a rise in imports accompanying the economy's reopening.


Indonesian Rupiah Shines in Volatile Times

Elias Lisberg Glistrup

<ul><li>We see growth trending higher in the cyclical parts of the economy through April on our models and nowcasts, and Korean industries are well-positioned to capitalize on global cyclical tailwinds.</li><li>Especially as Chinese economic activity picks up pace.</li><li>The Caixin PMI suggests expansion, and given trade ties and scarcity of semis this should, all else equal, continue to boost Korean exports.</li></ul>

We see growth trending higher in the cyclical parts of the economy through April on our models and nowcasts, and Korean industries are well-positioned to capitalize on global cyclical tailwinds.Especially as Chinese economic activity picks up pace.The Caixin PMI suggests expansion, and given trade ties and scarcity of semis this should, all else equal, continue to boost Korean exports.

Emerging Markets: Legs to the Korea case or time to cash in?

Podcast by J.P. Morgan analysts on global markets, At Any Rate

At Any Rate

Podcast by J.P. Morgan analysts on global markets

Analysts from J.P. Morgan’s Research team take a closer look at the stories behind some of the biggest trends, themes and developments in markets today.

<ul><li>The global backdrop for the start of the year is better than anticipated, with a broad-based upturn in PMIs suggesting steady or even growing global and emerging market growth.</li><li>The US is experiencing some slowing in growth, but consumer demand is more solid, supported by strong labor markets and falling inflation.</li><li>China's GDP growth is expected to remain around 5.5% in the near term, but there are concerns about ongoing deflation, housing market weakness, and its impact on corporate revenues and private sector confidence. Outside of China, emerging markets in Asia and Latin America are seeing growth rebound, driven by improvements in consumer and industrial sectors.</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></p>

The global backdrop for the start of the year is better than anticipated, with a broad-based upturn in PMIs suggesting steady or even growing global and emerging market growth.The US is experiencing some slowing in growth, but consumer demand is more solid, supported by strong labor markets and falling inflation.China's GDP growth is expected to remain around 5.5% in the near term, but there are concerns about ongoing deflation, housing market weakness, and its impact on corporate revenues and private sector confidence. Outside of China, emerging markets in Asia and Latin America are seeing growth rebound, driven by improvements in consumer and industrial sectors.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

EM Fixed Income: Emerging Markets Outlook & Strategy for February

Brazil

The Brazilian real is the official currency of the Federative Republic of Brazil.  

BRL (USDBRL CURNCY)

Steno Signals #97 – 5 reasons why the CNY will be devalued next week and how to trade it

Happy Sunday from a sunny Copenhagen. I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I...

Steno Research

Portfolio Watch: No respite for Asian FX.. How to deal with it?

Welcome to our weekly Portfolio Watch!We have had a strong week in our portfolio with a USD-reflationary lean, but we are starting to contemplate...

Steno Research

Indonesian Rupiah Shines in Volatile Times

The Indonesian rupiah has outperformed most other EM currencies but headwinds may be appearing for the currency as the Fed starts raising rates and...

Gautam Jain, PhD, CFA

Emerging Markets: Legs to the Korea case or time to cash in?

We see growth trending higher in the cyclical parts of the economy through April on our models and nowcasts, and Korean industries are...

Steno Research

EM Fixed Income: Emerging Markets Outlook & Strategy for February

The global economy is performing better than expected at the start of the year, with strong growth in emerging markets and resilient growth in...

At Any Rate