Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Macroeconomics

<ul><li>Sharp Bond Yield Drop: 10- and 30-year bond yields plunged to their base targets of 2.41% and 2.61%, falling by 3.2 and 5 basis points, respectively.</li><li>These Base Targets were set in our previous Notes on China.</li><li>Downside Trigger: The CSI 1000 and ChiNext indices fell sharply due to "Snowball Structures" exceeding their limits, typically triggered when the index drops 20% or more.</li></ul>

Sharp Bond Yield Drop: 10- and 30-year bond yields plunged to their base targets of 2.41% and 2.61%, falling by 3.2 and 5 basis points, respectively.These Base Targets were set in our previous Notes on China.Downside Trigger: The CSI 1000 and ChiNext indices fell sharply due to "Snowball Structures" exceeding their limits, typically triggered when the index drops 20% or more.

Chinese Equity Markets: Wild Ride, But "Xi Briefing" Steals the Show

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.

Cross Asset Strategy

<ul><li>Takeaway:China serves as the primary deflationary force in the global macroeconomic landscape.</li><li>Despite China’s slowing growth, potential policy responses might paradoxically exacerbate deflationary pressures.</li><li>We anticipate rising inflation risks linked to potential supply shocks resulting from geopolitical developments.</li></ul>

Takeaway:China serves as the primary deflationary force in the global macroeconomic landscape.Despite China’s slowing growth, potential policy responses might paradoxically exacerbate deflationary pressures.We anticipate rising inflation risks linked to potential supply shocks resulting from geopolitical developments.

EM by EM #39: All Roads Out of China Lead to Goods Disinflation

Head of Research and Global Chief Strategist, Steno Research

Andreas Steno

Head of Research and Global Chief Strategist

<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?

<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>Here at Steno Research, our primary concern has been growth rather than inflation since around the end of H1.</li><li>While this divergence is gradually gaining mainstream recognition, emerging markets have been well ahead of the curve.</li><li>Consequently, disinflationary surprises continue to be prevalent.</li></ul>

Here at Steno Research, our primary concern has been growth rather than inflation since around the end of H1.While this divergence is gradually gaining mainstream recognition, emerging markets have been well ahead of the curve.Consequently, disinflationary surprises continue to be prevalent.

EM by EM #29: Biden’s Party, EM’s Hangover & Scholz’s Nightmare

China

Shenzhen Composite Index is an actual market-cap weighted index (no free float factor) that tracks the stock performance of all the A-share and B-share lists on Shenzhen Stock Exchange. The index was developed on April 3, 1991 with a base price of 100. 

Shenzhen Stock Exchange Composite Index (SZCOMP INDEX)

Shenzhen Stock Exchange Composite Index (SZCOMP INDEX)

Chinese Equity Markets: Wild Ride, But "Xi Briefing" Steals the Show

Sharp Bond Yield Drop: 10- and 30-year bond yields plunged to their base targets of 2.41% and 2.61%, falling by 3.2 and 5 basis points, respectively.

Untying The Gordian Knot

EM by EM #39: All Roads Out of China Lead to Goods Disinflation

Takeaway: China serves as the primary deflationary force in the global macroeconomic landscape. Despite China’s slowing growth, policy responses...

Steno Research

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

EM by EM #29: Biden’s Party, EM’s Hangover & Scholz’s Nightmare

Here at Steno Research, our primary concern has been growth rather than inflation since around the end of H1. While this divergence is gradually...

Steno Research