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>Welcome back to our weekly positioning update.</li><li>It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest whether it was the beginning of a broader outflow from large cap / tech into small cap stocks and indices like Russell 2000, or if it was simply a hiccup due to extended positioning and a profound fear that the cutting cycle was already fully priced in, leaving tiny room for extensive gains in large cap stocks, which were up &gt;20% YTD before the CPI report.</li><li>We provide 3 reasons as to why it was not a rotation below.</li></ul>

Welcome back to our weekly positioning update.It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest whether it was the beginning of a broader outflow from large cap / tech into small cap stocks and indices like Russell 2000, or if it was simply a hiccup due to extended positioning and a profound fear that the cutting cycle was already fully priced in, leaving tiny room for extensive gains in large cap stocks, which were up &gt;20% YTD before the CPI report.We provide 3 reasons as to why it was not a rotation below.

Positioning Watch – There was no “rotation” from large to small caps

Metals, Ores, and Mining Firms, Mint Finance

Pranay Yadav

Metals, Ores, and Mining Firms

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Macroeconomics

<ul>
<li>The likelihood of imminent rate cuts has increased due to recent cooling in core CPI, driving anticipatory normalization of the yield curve.</li>
<li>According to FedWatch, expected rate cuts totaling 100 basis points by March 2025 are driven by cooling inflation, improving economic data, and the increasing fiscal burden of U.S. debt.</li>
<li>Historical data shows yield spread between 2Y and 10Y treasuries recovered just before and after rate cuts, signaling investor expectations front-running monetary easing. </li>
</ul>


The likelihood of imminent rate cuts has increased due to recent cooling in core CPI, driving anticipatory normalization of the yield curve.
According to FedWatch, expected rate cuts totaling 100 basis points by March 2025 are driven by cooling inflation, improving economic data, and the increasing fiscal burden of U.S. debt.
Historical data shows yield spread between 2Y and 10Y treasuries recovered just before and after rate cuts, signaling investor expectations front-running monetary easing. 


Yield Curve Normalisation on Rate Cut Anticipation

<ul><li>Good evening from Europe! The quarterly refunding announcement is due on July 29, and it always holds the potential to spook duration markets and liquidity betas.</li><li>The release of the updated budget projections from the CBO in June garnered attention as they raised their budget deficit projections by around $400 billion compared to the winter projections in February.</li><li>Not all of these outlays are newsworthy for the US Treasury.</li></ul>

Good evening from Europe! The quarterly refunding announcement is due on July 29, and it always holds the potential to spook duration markets and liquidity betas.The release of the updated budget projections from the CBO in June garnered attention as they raised their budget deficit projections by around $400 billion compared to the winter projections in February.Not all of these outlays are newsworthy for the US Treasury.

Debt Watch: Will the US Treasury spook markets with issuance in the QRA again?

<ul>
<li>Discrepancies between establishment and household job surveys highlight economic stress; full-time employment declines, indicating households remain stressed even as non-farm payrolls rise.</li>
<li>Subsequent bond yield movements, particularly the persistent inversion of the 30Y-2Y spread, reflect investor skepticism about long-term economic stability and delayed rate cuts.</li>
<li>Upcoming U.S. elections and this week's economic reports, including the May CPI and revised Federal Reserve projections, may push rate cut expectations even further ahead.</li>
</ul>


Discrepancies between establishment and household job surveys highlight economic stress; full-time employment declines, indicating households remain stressed even as non-farm payrolls rise.
Subsequent bond yield movements, particularly the persistent inversion of the 30Y-2Y spread, reflect investor skepticism about long-term economic stability and delayed rate cuts.
Upcoming U.S. elections and this week's economic reports, including the May CPI and revised Federal Reserve projections, may push rate cut expectations even further ahead.


Yield Curve Inverts Further on Rising Recession Risk

<ul>
<li>Fed's decision to taper its balance sheet runoff has provided support to long-term treasuries, particularly 10-year notes, signaling a potential rise in demand and a move towards yield curve normalization.</li>
<li>Recent treasury auction results reflect a divergence in demand across maturities; long-term 10-year treasuries show weaker performance compared to strong showings in shorter 3-year and 5-year maturities.</li>
<li>Data-Dependent Fed is likely to be influenced by improving economic indicators, supporting a normalization of the yield curve. During normalization, the 10Y-2Y spread is the superior instrument for exposure. </li>
</ul>


Fed's decision to taper its balance sheet runoff has provided support to long-term treasuries, particularly 10-year notes, signaling a potential rise in demand and a move towards yield curve normalization.
Recent treasury auction results reflect a divergence in demand across maturities; long-term 10-year treasuries show weaker performance compared to strong showings in shorter 3-year and 5-year maturities.
Data-Dependent Fed is likely to be influenced by improving economic indicators, supporting a normalization of the yield curve. During normalization, the 10Y-2Y spread is the superior instrument for exposure. 


Long 10Y, Short 2Y on Yield Curve Normalisation

US 10Y (USGG10YR INDEX)

Positioning Watch – There was no “rotation” from large to small caps

Welcome back to our weekly positioning update. It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest...

Steno Research

Yield Curve Normalisation on Rate Cut Anticipation

Recent cooling in core CPI has increased the likelihood of rate cuts, driving anticipatory normalization of the yield curve with expected cuts...

Mint Finance

Debt Watch: Will the US Treasury spook markets with issuance in the QRA again?

Good evening from Europe! The quarterly refunding announcement is due on July 29, and it always holds the potential to spook duration markets and...

Steno Research

Yield Curve Inverts Further on Rising Recession Risk

Discrepancies in job surveys show economic stress, full-time employment drops despite rising payrolls. Bond yield inversion signals investor doubt...

Mint Finance

Long 10Y, Short 2Y on Yield Curve Normalisation

Fed's tapering decision boosts long-term treasuries, signaling potential yield curve normalization with stronger demand for 10-year notes.

Mint Finance

Positioning Watch – There was no “rotation” from large to small caps

Welcome back to our weekly positioning update. It’s hard not to touch upon the recent moves in equities once again, with markets trying to digest...

Steno Research

Yield Curve Normalisation on Rate Cut Anticipation

​Recent cooling in core CPI has increased the likelihood of rate cuts, driving anticipatory normalization of the yield curve with expected cuts...

Mint Finance

Debt Watch: Will the US Treasury spook markets with issuance in the QRA again?

Good evening from Europe! The quarterly refunding announcement is due on July 29, and it always holds the potential to spook duration markets and...

Steno Research

Yield Curve Inverts Further on Rising Recession Risk

​Discrepancies in job surveys show economic stress, full-time employment drops despite rising payrolls. Bond yield inversion signals investor doubt...

Mint Finance

Long 10Y, Short 2Y on Yield Curve Normalisation

​Fed's tapering decision boosts long-term treasuries, signaling potential yield curve normalization with stronger demand for 10-year notes.

Mint Finance

Recent cooling in core CPI has increased the likelihood of rate cuts, driving anticipatory normalization of the yield curve with expected cuts...

Discrepancies in job surveys show economic stress, full-time employment drops despite rising payrolls. Bond yield inversion signals investor doubt...

Fed's tapering decision boosts long-term treasuries, signaling potential yield curve normalization with stronger demand for 10-year notes.