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>Takeaways:We maintain a bearish outlook on MXN, questioning the effectiveness of Banxico’s efforts in light of a bleak economic outlook.</li><li>We believe that market distress surrounding Egypt is exaggerated, and we speculate whether Saudi Arabia has silently committed to supporting higher crude oil pricesThe US is undergoing a pivotal moment as the Treasury exercises restraint, possibly signaling the end of US exceptionalism.</li><li>We anticipate reduced concerns about US bond yields impacting global growth, despite substantial issuance.</li></ul>

Takeaways:We maintain a bearish outlook on MXN, questioning the effectiveness of Banxico’s efforts in light of a bleak economic outlook.We believe that market distress surrounding Egypt is exaggerated, and we speculate whether Saudi Arabia has silently committed to supporting higher crude oil pricesThe US is undergoing a pivotal moment as the Treasury exercises restraint, possibly signaling the end of US exceptionalism.We anticipate reduced concerns about US bond yields impacting global growth, despite substantial issuance.

EM by EM 41: Fearing the Fury but Fading the Fear

External broker reports(aggregated public sources), Scotiabank

Scotiabank

External broker reports(aggregated public sources)

Scotiabank’s global foreign exchange strategy team provides in-depth regional insights and macro-economic analysis for G10 and advanced economies, Asia Pacific, and Latin America. Find technical and fundamental strategy reports focused on trade ideas, market risks, and the unfolding macro outlook. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

FX & Rates

<ul><li>The USD remains range-bound in broad terms and is trading mixed on the session again in the absence of a stronger sense of direction across the major currencies.</li><li>Gains in the dollar index (DXY) peaked around 103.8 yesterday, equating to a retest of last week’s high.</li><li>The turn lower in the index tilts short-term technical risks to the downside and a test of the 103 area but whether the markets can muster the momentum to push lower ahead of Wednesday’s FOMC decision remains to be seen. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The USD remains range-bound in broad terms and is trading mixed on the session again in the absence of a stronger sense of direction across the major currencies.Gains in the dollar index (DXY) peaked around 103.8 yesterday, equating to a retest of last week’s high.The turn lower in the index tilts short-term technical risks to the downside and a test of the 103 area but whether the markets can muster the momentum to push lower ahead of Wednesday’s FOMC decision remains to be seen. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

<ul><li>Yesterday, the US Treasury revealed the issuance targets for Q1 and Q2.</li><li>The net addition to marketable debt is $760 billion for Q1.</li><li>While this is a substantial amount, it’s $55 billion less than the October estimate for Q1 ($816 billion).</li></ul>

Yesterday, the US Treasury revealed the issuance targets for Q1 and Q2.The net addition to marketable debt is $760 billion for Q1.While this is a substantial amount, it’s $55 billion less than the October estimate for Q1 ($816 billion).

US Liquidity & Debt Watch: Yellen to Decide the QT Tapering Timing Tomorrow

<ul><li>Main findings: The risk-neutral probability distribution for USD 1Y inflation has a substantially larger right-hand skew than the one for EUR-flation, suggesting that markets are starting to factor in risks of accelerating USD inflation.</li><li>Based on the probability functions, the average market-based 1Y USD-flation expectations are anchored ABOVE 2%, while the EUR-flation mean hovers just above 1.5%.</li><li>Still, the Fed was expected to cut MORE than the ECB in 2024 until very recently.</li></ul>

Main findings: The risk-neutral probability distribution for USD 1Y inflation has a substantially larger right-hand skew than the one for EUR-flation, suggesting that markets are starting to factor in risks of accelerating USD inflation.Based on the probability functions, the average market-based 1Y USD-flation expectations are anchored ABOVE 2%, while the EUR-flation mean hovers just above 1.5%.Still, the Fed was expected to cut MORE than the ECB in 2024 until very recently.

Inflation Watch – How are markets pricing inflation in 1 year?

<ul><li>The latest snapshot of FX sentiment and positioning provided by the CFTC data for the week through January 23rd reflect a further reduction in overall USD bearishness, in keeping with the broader USD rebound seen in early 2024 so far.</li><li>Non-commercial (speculative) traders pared aggregate USD shorts (against the major currencies we monitor for this report) USD3.6bn in the week through last Tuesday, taking the overall net short back to USD5.7bn.</li><li>Additional data shows Institutional Accounts (real money traders) clipping aggregate USD longs USD4.5bn on the week while Leveraged Accounts (hedge funds) reduced a small net long from the prior couple of weeks to effectively flat</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The latest snapshot of FX sentiment and positioning provided by the CFTC data for the week through January 23rd reflect a further reduction in overall USD bearishness, in keeping with the broader USD rebound seen in early 2024 so far.Non-commercial (speculative) traders pared aggregate USD shorts (against the major currencies we monitor for this report) USD3.6bn in the week through last Tuesday, taking the overall net short back to USD5.7bn.Additional data shows Institutional Accounts (real money traders) clipping aggregate USD longs USD4.5bn on the week while Leveraged Accounts (hedge funds) reduced a small net long from the prior couple of weeks to effectively flatContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CFTC Weekly Sentiment Report - USD Sentiment Improves on EUR Long Liquidation

United States

The euro is the official currency of the European Economic & Monetary Union.  The US dollar is the official currency of the United States of America.

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EM by EM 41: Fearing the Fury but Fading the Fear

Takeaways:We maintain a bearish outlook on MXN, questioning the effectiveness of Banxico’s efforts in light of a bleak economic outlook. We...

Steno Research

FX Daily - USD Slips on Lower Yields

The USD remains range-bound in broad terms and is trading mixed on the session again in the absence of a stronger sense of direction across the...

Scotiabank

US Liquidity & Debt Watch: Yellen to Decide the QT Tapering Timing Tomorrow

Yesterday, the US Treasury revealed the issuance targets for Q1 and Q2. The net addition to marketable debt is $760 billion for Q1. While this is...

Steno Research

Inflation Watch – How are markets pricing inflation in 1 year?

Main findings: The risk-neutral probability distribution for USD 1Y inflation has a substantially larger right-hand skew than the one for...

Steno Research

CFTC Weekly Sentiment Report - USD Sentiment Improves on EUR Long Liquidation

The latest snapshot of FX sentiment and positioning provided by the CFTC data for the week through January 23rd reflect a further reduction in...

Scotiabank

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