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.

FX & Rates

<ul><li>The Federal Reserve was expected to announce tapering of quantitative tightening (QT) in March and implement it in April, but recent minutes suggest a more relaxed approach with no urgency to start the process soon.</li><li>SOFR rates have trended lower in January, easing concerns over upward pressure, and there is plenty of liquidity in the marketplace, with significant RRP and reserve balances.</li><li>Forecasting for the Fed's balance sheet evolution suggests a less volatile TGA balance and a shift in the relationship between t-bill issuance and RRP balances, leading to a more stable scenario for reserves in the near term.</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 Federal Reserve was expected to announce tapering of quantitative tightening (QT) in March and implement it in April, but recent minutes suggest a more relaxed approach with no urgency to start the process soon.SOFR rates have trended lower in January, easing concerns over upward pressure, and there is plenty of liquidity in the marketplace, with significant RRP and reserve balances.Forecasting for the Fed's balance sheet evolution suggests a less volatile TGA balance and a shift in the relationship between t-bill issuance and RRP balances, leading to a more stable scenario for reserves in the near term.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

US Rates: Slowly but Surely, Pushing Back the QT Taper Timeline

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.

Cross Asset Strategy

<ul><li>Money trends were abysmal for most parts of 2022 and the early parts of 2023, but we are starting to see interesting trends arising in the global money growth with clear geographical divergences.</li><li>Japan, China and the Euro zone have reported January M1, M2 and M3 developments and while trends remain benign in JPY and CNY, the money trends in EUR are re-worsening.</li><li>A gap seems to be opening between USD and EUR money trends, which rhymes well with our strong thesis of a growing inflation gap between the US and the Euro zone.</li></ul>

Money trends were abysmal for most parts of 2022 and the early parts of 2023, but we are starting to see interesting trends arising in the global money growth with clear geographical divergences.Japan, China and the Euro zone have reported January M1, M2 and M3 developments and while trends remain benign in JPY and CNY, the money trends in EUR are re-worsening.A gap seems to be opening between USD and EUR money trends, which rhymes well with our strong thesis of a growing inflation gap between the US and the Euro zone.

Money Watch: Trillions of USDs Are Waiting to Be Unleashed

<ul><li>Hello everyone, and welcome back to our weekly positioning watch! We have been all about the possibility of a cyclical rebound with the US economy showing great signs at the moment, and China is also potentially looking to beat the fairly bearish expectations (and why barely anyone has been net long cyclicals in all asset spaces).</li><li>This leaves markets with a great divergence, as Europe is yet to show the same signs of momentum, and inflation expectations (between USD and EUR) are also starting to diverge, but positioning has not followed accordingly.</li><li>Let’s rerun our current trades to kick things off: Equities: Long Materials and Long Korea (as a China proxy).</li></ul>

Hello everyone, and welcome back to our weekly positioning watch! We have been all about the possibility of a cyclical rebound with the US economy showing great signs at the moment, and China is also potentially looking to beat the fairly bearish expectations (and why barely anyone has been net long cyclicals in all asset spaces).This leaves markets with a great divergence, as Europe is yet to show the same signs of momentum, and inflation expectations (between USD and EUR) are also starting to diverge, but positioning has not followed accordingly.Let’s rerun our current trades to kick things off: Equities: Long Materials and Long Korea (as a China proxy).

Positioning Watch – Commodities Are Finally Moving

Junior Finance Analyst, Steno Research

Ulrik Simmelholt

Junior Finance Analyst

<ul><li>Yesterday we got the full release of the February Ifo report from Germany.</li><li>We note that price expectations in services ex. real estate fell almost 10 percentage points.</li><li>One of our high conviction macro bets for this year is the major divergence between US and Euro inflation and looking at the below chart using employment data from Ifo and compensation plans from the NFIB Survey in the US certainly points in this direction.</li></ul>

Yesterday we got the full release of the February Ifo report from Germany.We note that price expectations in services ex. real estate fell almost 10 percentage points.One of our high conviction macro bets for this year is the major divergence between US and Euro inflation and looking at the below chart using employment data from Ifo and compensation plans from the NFIB Survey in the US certainly points in this direction.

Macro Nugget: Diverging US and Europe Inflation Outlook

Macroeconomics

<ul><li>We have been banging the drum on a potential sharp gap opening between inflation trends in the US and in Germany (or the Euro zone).</li><li>The market has slowly but surely started to acknowledge the trend, but we continue to see traded inflation spreads as vastly mispriced given the forward looking indicators on inflation.</li><li>The IFO survey details from Germany made for very benign inflation reading as price expectations decline in manufacturing, autos and metal and not least SERVICES.</li></ul>

We have been banging the drum on a potential sharp gap opening between inflation trends in the US and in Germany (or the Euro zone).The market has slowly but surely started to acknowledge the trend, but we continue to see traded inflation spreads as vastly mispriced given the forward looking indicators on inflation.The IFO survey details from Germany made for very benign inflation reading as price expectations decline in manufacturing, autos and metal and not least SERVICES.

Macro Nugget: MAJOR tradeable gap opening between Germany and the US

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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US Rates: Slowly but Surely, Pushing Back the QT Taper Timeline

Overall, the Federal Reserve did not make any changes to Quantitative Tightening in March, with forecasts suggesting that RRP and reserves will...

At Any Rate

Money Watch: Trillions of USDs Are Waiting to Be Unleashed

Money trends were abysmal for most parts of 2022 and the early parts of 2023, but we are starting to see interesting trends arising in the global...

Steno Research

Positioning Watch – Commodities Are Finally Moving

Hello everyone, and welcome back to our weekly positioning watch!We have been all about the possibility of a cyclical rebound with the US economy...

Steno Research

Macro Nugget: Diverging US and Europe Inflation Outlook

Yesterday we got the full release of the February Ifo report from Germany. We note that price expectations in services ex. real estate fell almost...

Steno Research

Macro Nugget: MAJOR tradeable gap opening between Germany and the US

We have been banging the drum on a potential sharp gap opening between inflation trends in the US and in Germany (or the Euro zone). The market...

Steno Research

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