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>Markets are pricing in heavy cuts for next year as inflation keeps coming in soft, making a soft landing the base case for the bulls, but everything comes at a price.</li><li>But how are assets likely to perform if the market narrative is correct and yields will indeed come down in a continued bull-steepening fashion, which in our view is the most likely scenario in H1 2024?</li><li>We have pulled out some of our cross-asset beta studies from our data-library to provide you with an overview of how assets perform during various yield curve regimes.</li></ul>

Markets are pricing in heavy cuts for next year as inflation keeps coming in soft, making a soft landing the base case for the bulls, but everything comes at a price.But how are assets likely to perform if the market narrative is correct and yields will indeed come down in a continued bull-steepening fashion, which in our view is the most likely scenario in H1 2024?We have pulled out some of our cross-asset beta studies from our data-library to provide you with an overview of how assets perform during various yield curve regimes.

Bull Steepening Watch – Is Lower Yields Really What Risk Assets Want?

Head of Research, Steno Research

Emil Moller

Head of Research

<ul><li>As we move beyond the final Fed decision of the year, we can speculate on how the EM space may respond to Powell’s press conference tonight.</li><li>Before diving into that, let’s discuss some recent developments that have occurred in China since our last update on the situation in Beijing.</li><li>While the market and all the mainstream news outlets have been awaiting the third plenum to take place in vain,  China’s Central Economic Work Conference was held the past two days.</li></ul>

As we move beyond the final Fed decision of the year, we can speculate on how the EM space may respond to Powell’s press conference tonight.Before diving into that, let’s discuss some recent developments that have occurred in China since our last update on the situation in Beijing.While the market and all the mainstream news outlets have been awaiting the third plenum to take place in vain,  China’s Central Economic Work Conference was held the past two days.

EM by EM #34: Xi’s Whip and Powell’s Kneeling

<ul><li>We have used the 2007 = 2023 analogy a few times already this year and we continue to find coincidental evidence that looks a lot like the emerging pressures built up in the quarters preceding the financial crisis.</li><li>The outcome of 2024 is still up in the air, but credit indicators do not look pretty ahead of next year when we combine the impulse in China, the US and the Euro area in an aggregate model and judging from the central bank behavior, we see a lot of similarities to 2007 across the BoJ, the Fed and the ECB.</li><li>Let’s briefly explain why in this central bank watch piece! </li></ul>

We have used the 2007 = 2023 analogy a few times already this year and we continue to find coincidental evidence that looks a lot like the emerging pressures built up in the quarters preceding the financial crisis.The outcome of 2024 is still up in the air, but credit indicators do not look pretty ahead of next year when we combine the impulse in China, the US and the Euro area in an aggregate model and judging from the central bank behavior, we see a lot of similarities to 2007 across the BoJ, the Fed and the ECB.Let’s briefly explain why in this central bank watch piece! 

G3 Central Bank Watch: More Fuel to the 2007 = 2023 Analogy

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Macroeconomics

<ul>
<li>FDI into China turned negative. To explain why, we look at interest rate differentials, profitability, and ‘uninvestability.’ Meanwhile, the country has slipped into deflation again as it buys gold like there is no tomorrow.</li>
<li>US consumer credit is rolling over as the highest yields in decades take their toll. When credit growth stumbles, GDP growth will soon follow. </li>
<li>We look at key takeaways of the latest Fed SLOOS, the surprising decline in oil prices, our Fear &amp; Frenzy Sentiment Index, and earnings surprises &amp; stock market reactions.</li>
</ul>


FDI into China turned negative. To explain why, we look at interest rate differentials, profitability, and ‘uninvestability.’ Meanwhile, the country has slipped into deflation again as it buys gold like there is no tomorrow.
US consumer credit is rolling over as the highest yields in decades take their toll. When credit growth stumbles, GDP growth will soon follow. 
We look at key takeaways of the latest Fed SLOOS, the surprising decline in oil prices, our Fear &amp; Frenzy Sentiment Index, and earnings surprises &amp; stock market reactions.


The Weekly Market Monitor – China Makes History, Nobody Likes US Debt, and a Massive Chart on Yields

<ul>
<li>Our Fear &amp; Frenzy Sentiment Index has hit ‘FRENZY,’ sending a short-term SELL signal! </li>
<li>The Fed is likely done, especially with inflation expectations falling, keeping real yields high. Unfortunately, some macro indicators hint at deflation, which is the ugly side of disinflation.</li>
<li>China, new week, same story. China’s property sector is going absolutely nowhere. In fact, things are worsening with the decline in house prices the steepest nine(!) years.</li>
</ul>


Our Fear &amp; Frenzy Sentiment Index has hit ‘FRENZY,’ sending a short-term SELL signal! 
The Fed is likely done, especially with inflation expectations falling, keeping real yields high. Unfortunately, some macro indicators hint at deflation, which is the ugly side of disinflation.
China, new week, same story. China’s property sector is going absolutely nowhere. In fact, things are worsening with the decline in house prices the steepest nine(!) years.


The Weekly Market Monitor – On Deflation, Spot Bitcoin ETFs, Rising Delinquencies, & Faltering China

China

The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. The index was developed on December 19, 1990 with a base value of 100. 

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

Shanghai Stock Exchange Composite Index (SHCOMP INDEX)

Bull Steepening Watch – Is Lower Yields Really What Risk Assets Want?

Let’s run through each asset class to see where to put your eggs if a bull-steepening of the yield curve continues into 2024.

Steno Research

EM by EM #34: Xi’s Whip and Powell’s Kneeling

Despite aiming for growth, China won’t employ potent fiscal or monetary policies; instead, the focus is on boosting confidence and shaping a...

Steno Research

G3 Central Bank Watch: More Fuel to the 2007 = 2023 Analogy

The outcome of 2024 is still up in the air, but credit indicators do not look pretty ahead of next year when we combine the impulse in China, the...

Steno Research

The Weekly Market Monitor – China Makes History, Nobody Likes US Debt, and a Massive Chart on Yields

Start your week in financial markets with last week's biggest charts and stories! The Weekly Market Monitor will keep you ahead of markets.

Jeroen Blokland

The Weekly Market Monitor – On Deflation, Spot Bitcoin ETFs, Rising Delinquencies, & Faltering China

Equity markets are at risk if declining price pressures must be attributed to slowing growth. China's Real Estate is still a mess, while small caps...

Jeroen Blokland