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Macro and Cross Asset Strategy

Jan 21
0

Weekly Top Ten Macro and Cross Asset Strategy – Jan 21, 2024

By | Macro and Cross Asset Strategy
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. 44% of Korean Stocks Are Trading Below Book Value – FSC Wants to Improve This (Following Japan)

By Douglas Kim

  • FSC Chairman Kim Joo-hyun mentioned that too many companies in Korea are trading below book value and the FSC plans to implement changes to improve upon this issue. 
  • According to Korea Exchange, 1,111 companies out of total listed in KOSPI and KOSDAQ in Korea (2,538) are trading at below 1x book value (PBR) (liquidation value). 
  • According to the Capital Group, about 39% of companies in the TOPIX trade below book value, compared to just 5% for companies in the S&P 500 Index. 

2. Global Liquidity And The US Fed Pivot

By Michael J. Howell, CrossBorder Capital

  • Global Liquidity Cycle bottomed in October 2022.  Cycle set to expand further to a peak in late-2025
  • Federal Reserve liquidity already rising and driven over medium-term by need to monetize mandatory fiscal spending
  • Global Liquidity set to rise by US$12-15 trillion in 2024

3. 2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong – Part 4

By Rikki Malik

  • A shift in composition needed in a Japanese portfolio this year
  • A weaker US and Japanese economy together with a stronger Yen will  make sector allocation key.
  • Some sectors to avoid or invest in during this next phase.

4. Positioning Watch – Where to Find Value Currently

By Andreas Steno, Steno Research

  • Hello everyone, and welcome back to our weekly positioning overview.
  • We’ve been working on some new ways to look at positioning data across asset classes, and we’ll share some of the inaugural charts in today’s piece and will extend them, week by week.
  • Markets have more or less traded sideways since the start of the year, as the risk-on party has taken a bit of a breather it seems, despite rate cut expectations becoming even more embedded after the hawkish US CPI surprise last Thursday – strange move, and we’ll be surprised if probabilities don’t reverse within the next couple of price data points.

5. Steno Signals #82 – Inflation strikes back and no one is prepared for it

By Andreas Steno, Steno Research

  • Happy Sunday and welcome to our flagship editorial on the Coronation day of King Frederik in Copenhagen.
  • I guess it is somewhat telling for my lack of enthusiasm around the event that I am sitting here spitting out research instead of watching the Crowning.
  • The US CPI report printed a tad hotter than expected last week, but smack dab at our expectations of a 3.9% YoY level in core terms.

6. US Interest Rates and the Dollar and Impact on Markets

By Rikki Malik

  • Recent US economic data has been mixed on the inflation/growth front. 
  • Fed dot plot and messaging at odds with market expectations.
  • The extent of rate cuts is correct, but timing is likely not.

7. Don’t Fight the Fed (Or the Macro Trend)

By Cam Hui, Pennock Idea Hub

  • The global disinflation trend is continuing in an uneven manner and both the macro trend and Fed speakers are pointing toward a dovish Fed pivot.
  • This argues for a bull steepening of the yield curve and a bullish backdrop for stock prices.
  • However, investors should be aware that the lurking risk is the re-emergence of the transitory disinflation narrative, which could derail the bullish scenario.

8. Energy Cable: 4 Charts that Should Keep Largarde up at Night

By Ulrik Simmelholt, Steno Research

  • Takeaways: Price increases in goods likely to show up in Europe after the Summer
  • Watch out for energy prices once we start to fill up for next heating season
  • The recent turmoil in freight rates will likely exacerbate the divergence between US and the Eurozone

9. Taiwan Politics: New President Enters the Job with a Daunting In-Tray

By Manu Bhaskaran, Centennial Asia Advisors

  • The DPP’s William Lai prevailed after a competitive three-way race for the presidency, but his party’s loss of a legislative majority has produced a divided government.    
  • China will likely maintain a hawkish stance given the results, but we expect no drastic moves given Beijing’s other domestic and foreign policy challenges. 
  • Lai enters office with a full in-tray, having to bolster Taiwan’s security relationships with Washington and other allies, in addition to domestic issues on energy and demographics.

10. Japan Taking a Trip Down Tightening Lane? Sure!

By Jeroen Blokland, True Insights

  • Many economists expect the Bank of Japan, after systematically refusing to adjust its extremely loose monetary policy will be the only country to raise interest rates in 2024.
  • If the Bank of Japan decides to raise interest rates, at the same time, global tightening momentum wanes, betting on a stronger yen is a sure thing.
  • But with inflation dropping, the Manufacturing PMI below 50, consumer spending and real wages declining, the window for tighter monetary policy is closing rapidly, and hence a long yen position.
Jan 14
0

Weekly Top Ten Macro and Cross Asset Strategy – Jan 14, 2024

By | Macro and Cross Asset Strategy
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. 2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong – Part 3

By Rikki Malik

  • Risk-Reward now skewed towards reward in the Hong Kong market.
  • Barbell strategy with both high-beta and lower volatility dividend stocks.
  • Some initial ideas included to add or start a portfolio  incorporating HK stocks.

2. KOSPI Superperformance Stocks (2019-2023)

By Douglas Kim

  • In this insight, we analyze the top 10 performing stocks in KOSPI in each of the past five years (2019-2023) as well as for this entire period.
  • The top 10 performing stocks in KOSPI were up on average 310% in 2023, sharply outperforming KOSPI which was up 19%. 
  • There are some important takeaways from a review of the top 10 performing stocks in each of the five years in KOSPI, including market cap, sector rotation, and turnarounds.

3. EM by EM #37: The Taiwan election & the Trade war

By Emil Moller, Steno Research

  • A victory for Lai in the upcoming election has the potential to significantly elevate geopolitical risks.
  • Should Taipei fail to maintain a satisfactory relationship with Beijing threats of retaliation will fuel derisking going forwardThe Taiwan election could reignite another round of cold trade sanctions between the United States and China.
  • Given the current hawkishness of the Biden administration, it’s unlikely that this stance will be softened in the upcoming U.S. election.

4. Simple Math – Why Rates Must Fall!

By Jeroen Blokland, True Insights

  • The divergence among (bond) investors is rapidly increasing. One group expects yields to rise further, while the other expects yields to go down and remain low. I’m in the latter.
  • To maintain debt sustainability, real yields must remain below real GDP growth. But with declining potential GDP growth, this is not the case currently, and this includes the US.
  • In the Eurozone, the real yield – real GDP picture is distorted because the ECB must aim monetary policy at the weakest link, Italy. 

5. What’s next in the Red Sea and Taiwan?

By Mikkel Rosenvold, Steno Research

  • Welcome to the second Great Game of the year.
  • What an action-packed start to 2024 we’ve had in geopolitics, and the coming weeks are looking no less eventful.
  • This week, we take a look at the status in the Red Sea as well as Taiwan and give our prediction as to what the coming weeks will bring.

6. Vietnam: Resilient Economic Growth Driven by Friend-Shoring & Bamboo Diplomacy

By Suhas Reddy, Mint Finance

  • Vietnam’s GDP expanded by 5.05% in 2023, lower than the government’s official target of 6.5%
  • Chinese President Xi Jinping’s first visit to Vietnam in six years aims to strengthen ties between the two communist nations.
  • China and the US vying for cooperation with Vietnam in developing rare earth minerals essential for energy transition.

7. US Employment Data Confirms a Weakening Economy

By Rikki Malik

  • The December US Employment report shows a weaker outlook than the headline suggests.  
  • A loss of over 1.5 million full-time jobs in December.
  • Excluding government jobs, an exceptionally low number of new full-time jobs were created over the last year.

8. USD Liquidity Watch: Trading the end of QT

By Andreas Steno, Steno Research

  • Welcome to another edition of our USD Liquidity Watch series.
  • The investment bank consensus is now (finally) converging towards our long-held view that the US Treasury is effectively behind the liquidity steering wheels at the Fed.
  • Lorie Logan of the FOMC said on Friday that “… given the rapid decline of the ON RRP, I think it’s appropriate to consider the parameters that will guide a decision to slow the runoff of our assets.

9. Charting Beyond the Sanguine Stock Market

By Thomas Lam

  • The upcoming US elections and eventual Fed pivot may sway the stock market positively
  • But the different states of the US business cycle can prospectively instigate different equity market outcomes
  • Hence, it is important to monitor the roughly coincident or almost contemporaneous risk of a recession in the US for potential clues

10. Central Banks’ Policy Pivot Impact on Developed Markets

By Raghav Chandra Mathur, Criat

  • Throughout 2023, the global developed economy was at the forefront of tackling rising inflation that has been gathering steam since mid-2022.
  • The majority of developed G20 countries saw their central banks raise policy rates at record pace to tame rampant price increases.
  • Rapid tightening and the potential of an upcoming pivot has resultantly upended stability in growth prospects for the upcoming year.
Jan 07
0

Weekly Top Ten Macro and Cross Asset Strategy – Jan 7, 2024

By | Macro and Cross Asset Strategy
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. 5 Things We Watch – Freight Rates, Positioning, Liquidity, EUR-flation, Growth

By Andreas Steno, Steno Research

  • Welcome to the first 2024 edition of our ‘5 Things We Watch’, where we as always try to dissect global macro trends, how we see the world and how we trade it.
  • The overall consensus this year seems to be locked in on a soft landing in the US, but in our view, risks of tail-end events are increasing, making macro more important than ever in order to navigate financial markets in 2024.
  • Freight rates on routes with destinations in the Mediterranean (both shipments from Middle East and China) have generally been on the rise

2. Suez Watch: Massively Rising Container Freight Rates, While Dry Bulk, LNG and Crude Rates More Muted

By Ulrik Simmelholt, Steno Research

  • Takeaways upfront: No container shipping through Suez towards Europe and price increases ahead; Energy and dry bulk shipping is still alive; Expect transportation and apparel to see price increases in Europe; Hedging 2024 portfolios with long Shipping bets and/or long Energy bets make increasing sense.
  • Happy New Year everyone! Things are escalating in the Red Sea as shipping giants such as Maersk and Hapaq-Lloyd haven’t been convinced by the military efforts in the Red Sea and have now completely avoided transporting goods from Asia to Europe through the Red Sea.
  • That can be seen in prices which have seen one-way traffic the last week. Freight rates are up >100% this week, and we hear from sources that Maersk is now suggesting an all-in rate of USD 6000 TEU.

3. Charting Beyond the Near-Term Fed Pause

By Thomas Lam

  • The initial phase of Fed easing, from pre-Volcker to post-Greenspan, can differ, particularly on the magnitude    
  • Historical Fed pivots, from hiking to easing, tend to be sensitive to the state of the economy   
  • The extent of initial Fed easing around historical downturns was at least double the size when compared to episodes with no imminent recessions  

4. Macro Regime Indicator: Liquidity is everything in January

By Andreas Steno, Steno Research

  • New month, new regime, which means a new asset allocation for the month ahead.
  • The turn of the calendar once again calls for us to assess our outlook for the 3 main variables of interest: Liquidity, inflation and growth and feed them into our Regime Model and Asset Allocation tool that spits out the Sharpe Ratio optimizing portfolio given the assumptions about the variables of interest.
  • Remember that you can feed the model with your own forecasts to see which baskets to put your eggs in.

5. A Bull Market With Election Year Characteristics

By Cam Hui, Pennock Idea Hub

  • Long-Term models are signaling the revival of a long-term equity bull.
  • But the market may be vulnerable to some choppiness in the next few months.
  • The intermediate-term outlook for stocks continues to be bullish and we expect a positive year for the S&P 500 in 2024.

6. EUR Inflation Watch – The ECB forecast is OFF by >1.5%-points for Q1

By Andreas Steno, Steno Research

  • The smallest German state, Saarland, sneaked out its preliminary December inflation this morning and it was another soft surprise.
  • Saarland CPI increased a tad less than 0.1% on the month, which is below 0.2% in seasonally adjusted terms.
  • This is if anything a SOFT print relative to consensus expectations and as Saarland CPI explains 78% of the variability in the nationwide German CPI, it leaves a 0.1% MoM inflation print most likely for the German CPI.

7. China Property And The Demand For Commodities Puzzle

By Robert Ciemniak, Real Estate Foresight

  • China’s crude steel production data behaved differently in the 2021-2023 downturn relative to new home sales and new starts, compared to the prior cycles.
  • The 40% drop (12M vs prior 12M) at the low point for new starts compares with around 10% for the crude steel.
  • In this note, we outline a few possible explanations, with some twists.

8. What the Politics of 2024 Tell Us About 2025

By Cam Hui, Pennock Idea Hub

  • What does the political and economic landscape of 2024 mean for investors in 2025 under a Biden oe a Trump administration?
  • A Biden White House is more predictable using conventional economic analysis. Much depends on whether the Fed can achieve a soft landing of the economy. 
  • The effects of a Trump White House will be more difficult to predict. The only certain investment bet under a Trump administration may be to buy volatility.

9. Regional Economics:  Episodic Stresses, Not Prolonged Crises for Asia in 2024

By Manu Bhaskaran, Centennial Asia Advisors

  • While there will be economic and geopolitical shocks, we believe that these will cause episodic stresses, not lasting damage to the region’s growth or stability. 
  • Monetary policy, China’s economic performance, and geopolitical conflict will shape the economic outlook for the region, while government policy responses may provide economic upsides. 
  • Thus, we think that the Asia-Pacific region will exhibit commendable economic resilience and modestly improved growth compared to 2023.

10. EA: Inflation Springs as Energy Fades

By Phil Rush, Heteronomics

  • EA inflation undershot expectations for the fourth consecutive month but smashed the downtrend with a 0.5pp rise to 2.9% for Dec-23.
  • The run of downward surprises means Dec-23 inflation is 0.8pp lower than expected in Oct-23. However, it is close to expectations a year earlier.
  • Fading energy price disinflation drove the upside move in a timely reminder that all the EA’s other special aggregates remain well above 2%, discouraging ECB rate cuts.
Dec 31
0

Weekly Top Ten Macro and Cross Asset Strategy – Dec 31, 2023

By | Macro and Cross Asset Strategy
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. 5 Things That Could Wrongfoot Consensus in 2024

By Andreas Steno, Steno Research

  • The overwhelming consensus for 2024 continues to be a soft landing in the US with interest rates coming firmly down while growth continues on autopilot, which leaves a very decent, almost goldilocksy, outlook for risk assets.
  • But what if we don’t end in a soft landing, but rather one of the tail-end scenarios of either 1) a boom driven by easier financial conditions, which would force the Fed to push back a bit on rate cuts or 2) a recession, which would imply rates much lower than what consensus currently is.
  • We have chosen 5 “likely unlikely” scenarios for 2024, which are not as unlikely as current market pricing indicates.

2. 2024: Bold Predictions

By Jeroen Blokland, True Insights

  • We may see a US recession, followed by eight or more Fed rate cuts, a boost in liquidity, and hence another blockbuster year for risky assets.
  • In addition, we may see some credit rating downgrades of some major economies, emphasizing the question of how attractive (government) bonds are in a long-term multi-asset portfolio.
  • 2024 may accelerate the Great Portfolio Rebalancing, seeing investors move out of traditional asset classes (bonds) into scarce and under-owned asset classes (gold, bitcoin.)

3. EM by EM #36: What Goldman got wrong about China in 2023

By Emil Moller, Steno Research

  • Main conclusions up-front:It’s getting harder to disentangle politics from price movements in China, with the government becoming more involved in the equity market.
  • In stark contrast to their U.S. counterparts, Chinese banks are grappling with the weight of growing savings from consumers and businesses.
  • This surge is impacting their profitability, while the real estate sector’s challenges continue to linger.

4. Positioning Watch – How are markets positioned ahead of a turbulent 2024?

By Andreas Steno, Steno Research

  • The year has generally speaking been a forecasting challenge for most to say the least, and not a lot of people forecasted the ending that we’re left with, but how does the current price action and massive inflows into both equities and bonds leave us for 2024?
  • Sentiment has been EXTREMELY bullish in Q3 and Q4 based on our z-score sentiment model but almost solely built on equity momentum, which is rarely a good sign.
  • Both option ratios, credit-spreads and market breadth have turned bearish in Q4, which should leave markets vulnerable after the boost from positive liquidity trends dwindles during Q1 2024.

5. Bond Market Monitor: Time to Invest in EM Bonds

By Warut Promboon, Bondcritic

  • Here we are checking our thesis on the bond markets we reconfirmed as bullish back in September.
  • Declining inflation, as indicated by the November US Personal Consumption Expenditure (PCE) deflator, could lead to the 2% inflation target in 2024
  • A rate cut and a peak of a rate hike cycle plots a scenario where  fixed rate bonds will be the asset class of choice in 2024.

6. Hamas Rejects Ceasefire – Here’s Why It’s Actually Great News

By Mikkel Rosenvold, Steno Research

  • Welcome to a quick Holidays edition of Great Game – your weekly geopolitical update!
  • Yesterday, reports emerged that Hamas and Islamic Jihad had rejected an offer of a permanent cease-fire brokered by the Egyptians with the aid of Saudi Arabia and Qatar.
  • Reportedly, the deal would have involved a mass release of hostages, a permanent ceasefire and the formation of a transitional government in Gaza without the direct persecution or condemnation of Hamas and Islamic Jihad.

7. Steno Signals #79 – A Christmas present full of USD Liquidity from Powell and Yellen!

By Andreas Steno, Steno Research

  • Happy Sunday and welcome to a short and sweet version of our flagship editorial!
  • Liquidity conditions have improved markedly over the past couple of months, and we are about to enter a QE-like liquidity environment unless trends reverse soon, which they are unlikely to.
  • Liquidity has been improving at a $200bn a month pace since early November due to a pamphlet of tricks from BOTH the Fed and the US Treasury, and through the past weeks another sneaky “liquidity adding” factor has popped up! This is of major relevance to the overall risk sentiment.

8. Mint Macro Roundup: Inflation Cools in US, UK, & Japan Accentuating Central Bank Policy Divergence

By Suhas Reddy, Mint Finance

  • Inflation across the US, UK and Japan slowed sharply on the back of declining goods prices.
  • Rapidly cooling inflation brings into focus the diverging central bank policies – BoJ remains ultra-loose, Fed has turned dovish, while BoE continues to remain hawkish.
  • Personal spending in the US remains strong, providing upside to economic growth in Q4, but also risk of higher inflation.

9. Is Coinbase Rally Running Out of Steam?

By Pranay Yadav, Mint Finance

  • Outperformance during rallies is usually followed by sharper corrections during downturns. Buy the rumour and sell the news is common in crypto markets.
  • Coinbase is a top ranking performer. The crypto exchange stock is up a whopping 454% YTD outperforming BTC by almost 3x.
  • While Coinbase may do well in a continued cryptocurrency bull market, it is worth considering whether the rally has already played out.

10. Credit Watch: Nothing in the credit impulse speaks in favour of a 2024 comeback

By Andreas Steno, Steno Research

  • The equity market has been celebrating over the past couple of months and it seems like the economic consensus is moving towards a soft landing or even a no landing / re-acceleration at lightning speed.
  • Equities tend to trade closely connected to the cyclical components of the US economy with a strong correlation between ISM Manufacturing and annual returns in the S&P 500.
  • Most recent trends partially represent a bet on a rebound in the economic cycle in 2024, which looks unlikely in most of our medium-term forward looking models.
Dec 24
0

Weekly Top Ten Macro and Cross Asset Strategy – Dec 24, 2023

By | Macro and Cross Asset Strategy

1. The 2024 Liquidity BOOM?

By Michael J. Howell, CrossBorder Capital

  • US policy makers signal the peak in Fed Funds rates and to imply rates cut cuts as soon as March 2024
  • Fed Liquidity has risen by a whopping US$534 billion or 16.6% since the start of 2023
  • These moves are consistent with our long held view that the Global Liquidity cycle bottomed in October 2022 and is expanding towards a new peak in 2025.

2. 2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong – Part 2

By Rikki Malik

  • Risk reward favours a shift in allocation between these markets.
  • Hong Kong washed out from a sentiment, valuation and positioning perspective.
  • Minimal investor expectations  and continual disappointment  have set the stage for a rally in 2024.

3. Five Things We Watch For In 2024

By Ulrik Simmelholt, Steno Research

  • We’ll start today’s 5 things with a look at the central bank outlook for in 2024, then we’ll address the troubles for OPEC.
  • We move over to talk about China and afterwards Ukraine for some geopolitics.
  • Finally, we’ll end this year’s last 5 things with a crypto outlook.

4. Positioning Watch – Buy everything seems to be consensus

By Andreas Steno, Steno Research

  • Hello everyone, and welcome back to our weekly positioning watch following the surprisingly dovish FOMC meeting last Wednesday, which smells of a slight policy mistake given what we have been writing about forward-looking price and wage indicators over the past weeks now starting to tick upwards again.
  • Despite a couple of Fed members trying to retrace after the meeting, pushing back on rate-cut expectations, market positioning has turned VERY bullish over the past week, and oh boy has equity markets positioned themselves for a binary outcome.
  • The USDs parked at money-market funds have taken the spotlight since the FOMC meeting, as inflows in MMFs have continued despite 3-month T-bill yields reaching what looks to be a top after Powell’s remarks Wednesday.

5. Steno Signals #78 – Santa Powell Handing Out Gifts Even to the Naughty!

By Andreas Steno, Steno Research

  • Powell invited for a yuuuge risk asset party this week by allowing the market to continue to chase the narrative of material rate cuts in 2024.
  • This is (again) reminiscent of the 2006-2007 pause when the Fed allowed financial conditions to ease materially in the run-up to the recession.
  • During a hiking cycle, loads and loads of USDs are parked in cash-like setups due to a sudden better relative yield premium in almost risk-free structures.

6. Sentiment Nugget: Central Bank Divergence Into Year-End

By Andreas Steno, Steno Research

  • Into year-end we have noted a number of key shifts in what Central Bank language is actually telling us from a quantitative point of view.
  • We regularly track and update our measure of positivity/negativity of Bank language contained in statements, outlooks and speeches on a scale of -1 to +1 in our DataHub for premium subscribers.
  • There you can access full histories and dig deeper into the underlying drivers.

7. Mint Macro Roundup: BoJ Maintains Loose Policy Yet Yen Remains Strong

By Pranay Yadav, Mint Finance

  • BoJ stuck to its ultra-loose monetary policy at its policy meeting on 19/Dec. It continues to maintain an extremely dovish stance to encourage economic growth.
  • Governor Ueda stated that the prospects of inflation declining sustainably to target and wages rising and propping up demand remain high.
  • Yen initially weakened following continued easing however it has recovered losses and stands 1.7% stronger than its level before Fed’s dovish stance on 13/Dec.

8. Interest Rates and Oil: Crossroads Ahead

By Untying The Gordian Knot, Untying The Gordian Knot

  • US retail sales and inflation rates are retreating, and industrial activity is slowing.
  • Europe’s economic decline is accelerating compared to the US.
  • Oil prices are dipping in anticipation of weaker demand amidst a slowing economy signal.

9. Avoiding a Lost Decade: China’s Real Estate Adjustment Reaches Critical Juncture in 2024

By Said Desaque, DeSaque Macro Research

  • Japan endured years of economic stagnation due to an impaired banking system following the bursting its real estate bubble and some commentators currently fear a repeat experience in China.
  • Despite the potential for debt swaps with local government, regional banks will bear the brunt of loan restructuring to local government financing vehicles via higher loan-loss provisions.
  • The main of objective of central government in 2024 will be stabilising home sales in Tier-1 cities via easier policy measures. Bank lending to private property developers will remain tight.    

10. Keep Buying the Japanese Yen

By Rikki Malik

  • While the Bank of Japan didn’t change monetary policy -it just delays the inevitable.
  • Rate differentials have only one way to go and will benefit the JPY.
  • Position now for a strong JPY as the market anticipates the change.

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Dec 17
0

Weekly Top Ten Macro and Cross Asset Strategy – Dec 17, 2023

By | Macro and Cross Asset Strategy

1. 2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong – Part 1

By Rikki Malik

  • Risk reward favours this shift in allocation between these markets.
  • Japan will suffer from base effects on economic data and earnings this year as JPY move reverses.
  • Year end Positioning could provide attractive entry points for both legs.

2. The Psychology of Money: A Book Review

By Douglas Kim

  • In this insight, I review a fantastic book written by Morgan Housel called The Psychology of Money (published in 2020). 
  • “The most important part of every plan is planning on your plan not going according to the plan.” 
  • Three parts of the book were particularly outstanding including letter to author’s son, the story of Rick Guerin, and how mice helped the Russians to defeat the mighty German army. 

3. Foreign Investors Allowed to Begin Buying Korean Stocks Without Prior Authorization on 14 December

By Douglas Kim

  • On 13 December, the FSS announced that foreign investors will be allowed to start purchasing Korean stocks without prior authorization starting this week. 
  • The revised Capital Market Act will start to be implemented on 14 December repealing the time consuming and inconvenient pre-registration system for foreign investors.  
  • As a result of the Korean government making this change regulatory change, one of the beneficiaries is likely to be Interactive Brokers Group, Inc (IBKR US).

4. Steno Signals #77 – Oil Demand Is ALL TIME HIGH

By Andreas Steno, Steno Research

  • Happy Sunday and welcome to our weekly flagship editorial from Steno Research.
  • It has been an incredibly odd week in the economic calendar and our thesis of a strong year-end for USD key figures has so far been proven right, which especially after the NFP report re-ignited the USD and front-end USD rates, which has been our bet against especially European peers.
  • Most recent economic key figures from the US have not surprised positively to the extent we saw through the autumn, while Chinese key figures have woken up and made a decent comeback relative to expectations over the past months.

5. 5 (+1) Central Banks We Watch – Fed, ECB, BoE, Norge’s Bank, BoJ & BCB

By Andreas Steno, Steno Research

  • It’s central bank week once again, and that of course calls for us to share our thoughts ahead of the biggest meeting over the next week with Powell being the first to take the stage on Wednesday, expecting to hawk up the rhetoric a bit whilst keeping the Fed funds upper band steady at 5.5%.
  • The ECB has recently claimed the title as the most dovish central bank in G10 after markets have added roughly 20 bps of cuts in 2024 to market pricing, and markets now price in approx.
  • 115 bps of cuts in 2024.

6. Central Bank Review: Powell, a Genius or a Madman? 2024 Looks like a Year of Fat Tails

By Andreas Steno, Steno Research

  • USD markets felt almost EM like for a couple of hours after Jay Powell and the committee allowed markets to chase the cutting narrative by communicating three expected cuts in the dot plot for 2024.
  • I am not always convinced that the dot plot is a wise guidance tool as policy makers likely judge that a dot signaling three cuts relative to market pricing (ahead of the meeting) hinting of more than four cuts net/net should lead to a hawkish surprise.
  • The opposite of course happened since narrative chasers in markets rather look at the sequential move than the nominal forecast.

7. Great Game – Climate, Chips and Corruption!

By Mikkel Rosenvold, Steno Research

  • Welcome to your weekly geopolitical update from the Great Game! With a relatively quiet week in global affairs, we have time to dive into a couple of issues that we’ve been looking at over the past weeks.
  • But let’s start at the main stage with the current COP28 summit that’s about to wrap up.
  • Will “majlis” sit-downs save the climate?

8. In A Bitcoin Frenzy; Long BTC Miners & Short BTC

By Pranay Yadav, Mint Finance

  • BTC’s phenomenal +57% surge since September is propelled by key forces—ETF euphoria, a robust “Risk On” asset bull run, regulatory clarity, and the imminent BTC halving.
  • While BTC maintains resilience, mining firms, exemplified by Valkyrie Bitcoin Miners ETF (WGMI), have seen a 30% underperformance over the last 3 months.
  • Mining firms that have scaled up hash-rate over the past year and built up BTC holdings to support outperformance to BTC. However, ample cash reserves are vital.

9. Rate Cuts: How Much? How Quick? How Real?

By Srinidhi Raghavendra, Mint Finance

  • Western central bankers have made it amply clear that rate cuts are not a given. They remain data dependent. And the data is sending mixed signals.
  • Meanwhile markets are opting for selective hearing and are pricing sharp rate cuts soon. Inflation is hard to tackle in general. The last mile gets nasty. Are markets ready?
  • Base effects have contributed to the rapid slowdown in inflation. When these base effects fade, the false sense of safety could crater leading to a very different inflation narrative.

10. Positioning Watch – Are markets ready for Powell Wednesday?

By Andreas Steno, Steno Research

  • With Powell taking the stage on Wednesday, likely turning more hawkish in his rhetoric after weeks of financial conditions easing, we have had a look at if we are starting to see signs of markets reversing their ultra-bullish positioning.
  • In general markets have taken a bit of a breather from a positioning perspective after the historically bullish sentiment seen throughout November, and people are now starting to hedge their longs based on recent option volumes, with the aggregate US intraday put-call ratio now back solidly above 1.
  • Looks like traders are starting to hedge their equity bets going into the central bank bonanza this week.

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Dec 10
0

Weekly Top Ten Macro and Cross Asset Strategy – Dec 10, 2023

By | Macro and Cross Asset Strategy

1. Global Liquidity On The Rise: Is This Gold’s (And BitCoin’s) Breakout Moment?

By Michael J. Howell, CrossBorder Capital

  • High street inflation could fall in 2024 and real interest rates stay high, but the gold price and BitCoin (BTC$) may still break higher
  • Gold has a 1.5-1.6 times sensitivity factor to the growth in Global Liquidity. BitCoin is a whopping 5 times this! It is ‘exponential gold’
  • Global Liquidity looks set to double in size over the next decade driven by soaring World debts. Alongside, the US dollar has been eclipsed as the marginal World reserve asset

2. FSS Provides Further Details of Korean Companies That Plan to Change Dividend Payout System in 2024

By Douglas Kim

  • FSS provided further details as to the number of Korean companies that plan to change their dividend payout system to their shareholders in 2024.
  • There are 636 companies out of a total 2,267 listed companies in Korea (28%) that have confirmed that they will change their dividend payout system starting 2024.
  • As listed companies set different voting rights and dividend record dates from the end of the year, investors need to check the dividend record date and dividend amount before investing.

3. The Fate of Quantitative Tightening: Not Solely in the Hands of the Fed

By Said Desaque, DeSaque Macro Research

  • The twin pillars that underpinned US monetary policy since the global financial crisis made policy normalisation difficult. Investors believe quantitative tightening (QT) ceases once the federal funds rate is lowered.
  • Contrary to the fears encountered during the taper tantrum in 2013, QT has not dramatically tightened US financial conditions since 2017, thereby raising questions about whether any cessation is required.
  • High levels of bank reserves do not guarantee financial stability, but elevated Treasury borrowing and lower repo market liquidity pose threats that could ultimately force the Fed to end QT.

4. Positioning Watch – Everything better turn out the way markets want it

By Andreas Steno, Steno Research

  • Hello everyone, and welcome back to our weekly positioning watch, where we dig into everything positioning and sentiment-related.
  • This week will be all about equities and fixed income, which seems to be running the show at current junctures – just give the gold chart a look, which jumped some 2% on the back of pivot hopes and strong buying activity this morning during Asian hours, while sellers were nowhere to be seen, but fast-forwarding 10-11 hours, gold is now down somewhere near 0.2%.
  • A huge turnaround in markets which smells a lot like a short-squeeze or tight liquidity in the Asian markets today.

5. Steno Signals #76: The Fed Has Lost Control of Liquidity Trends

By Andreas Steno, Steno Research

  • Happy Sunday from frosty Copenhagen and welcome to our flagship editorial! The underlying demand trends are not strong.
  • Running credit card data has been weak in October/November, the credit impulse is worsening and there are signs of actual labour market softening around the otherwise sticky service sectors in the West, yet markets are partying like there is no tomorrow.
  • What is causing this disconnect and could it continue into the year-end?

6. 5 Things We Watch – Liquidity, Bond positioning, Oil, Consumer spending & Rates

By Andreas Steno, Steno Research

  • We’ve spent the past 2 days in London, meeting clients and hedge funds, and there was a lot of support for the idea/notion that SOFR-Fed Funds spreads reveal that USD Liquidity is not ample and that the Fed will have to end QT early.
  • The spread widening in SOFR – Fed Funds, caught a lot of attention over the past few days and it is interesting how swiftly the market jumps to the conclusion that it will lead to the Fed panic-ending QT already in Dec or January.
  • Why are SOFR – Fed Funds spreads widening and how do we deal with it?

7. Mint Macro Roundup: Dissecting The Recent Jobs Data

By Pranay Yadav, Mint Finance

  • Nonfarm payrolls showed 199k jobs added, higher than October and above expectations; Unemployment fell to 3.7% but wage growth strong at 4% YoY.
  • Earlier this week, JOLTs survey showed job opening slide 6.7% to 8.73 million, lowest in 2.5 years with jobs declining across industries.
  • Job market observed to be loosening and on-track to achieving soft-landing. going forward, it’s vital to watch for job losses.

8. The Week That Was in ASEAN@Smartkarma – Indofood’s On Track, ROTI’s Rising, and BliBli’s Omnichannel

By Angus Mackintosh, CrossASEAN Research

9. India Politics: State Elections Show Favourable Political Winds for Modi

By Manu Bhaskaran, Centennial Asia Advisors

  • Premier Modi’s BJP outperformed expectations by winning three state assembly elections, putting it in prime position for re-election in the 2024 general election. 
  • Modi’s personal appeal and welfarist policies will likely deliver dividends in the next elections. But a landslide win is far from guaranteed given the political dynamics. 
  • The government will thus avoid rocking the boat in terms of economic policy.  

10. The Market Meaning of a Gold Breakout

By Cam Hui, Pennock Idea Hub

  • Gold bulls became very excited when gold tested resistance at the 2000–2100 level. We have been more interested in the drivers of gold strength than trying to forecast gold itself.
  • Our analysis indicates that gold is rising on expectations of falling real rates, which also depresses the USD.
  • These factors should be bullish for the price of risky assets. Specifically, we would focus on financials and other early market cycle groups.

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Dec 03
0

Weekly Top Ten Macro and Cross Asset Strategy – Dec 3, 2023

By | Macro and Cross Asset Strategy

1. The US Fed May Find It Hard NOT to Cut Rates in 2024

By Michael J. Howell, CrossBorder Capital

  • Risk asset markets are driven by rising Global Liquidity and falling inflation. Low inflation in 2024 will be sufficient to justify a significant change in direction by the US Fed
  • Cyclical analysis points to a further sizeable improvement in Global Liquidity conditions over the next 12-18 months
  • Investment regime is heading towards its next phase of Calmwhich favors equities and sees steeper yield curves  ahead

2. Steno Signals #75 – The 2007/2008 Playbook Is Useful Again

By Andreas Steno, Steno Research

  • Happy Sunday and welcome to our weekly flagship editorial.
  • The soft landing narrative has seen material tailwinds over the past 6-8 weeks, while the recession narrative is fading fast.
  • This is the first prerequisite for an actual recession as a recession never arrives when everyone plans for one.

3. Investment Opportunities From A Global Leadership Review

By Cam Hui, Pennock Idea Hub

  • Global equities are surging, led by growth stocks. Stay with the current leadership until year-end as hedge funds are likely to engage in a beta chase for performance.
  • U.S. stocks are still the leaders, especially the megacap growth stocks.
  • Set-Ups for a new leadership are emerging in Europe and EM ex-China. Wait until early 2024 to re-evaluate the evolution of leadership before making any decisions on rotation.

4. End of Mandatory Lock-Up Periods for 53 Companies in Korea in December 2023

By Douglas Kim

  • We discuss the end of the mandatory lock-up periods for 53 stocks in Korea in December 2023, among which 6 are in KOSPI and 47 are in KOSDAQ.
  • These 53 stocks on average could be subject to further selling pressures in December and could underperform relative to the market.
  • Among these 53 stocks, top five market cap stocks include Doosan Robotics, Studio Dragon, Asicland, Manyo Factory, and Curocell. 

5. Positioning Watch – All About the Soft Landing Narrative

By Andreas Steno, Steno Research

  • Hello everyone, and welcome back to our weekly positioning watch, where we as always try to dig down into the latest positioning data and give you an overview of what’s moving narrative currently.
  • Sentiment and positioning are still skewed towards hopes of a soft landing, with bets being placed on lower yields, a weaker dollar, booming equities and almost non-existent credit spreads – ironically a prime condition for an upcoming recession (which is still our base case for H1 2024).
  • General media and story counts are also all about the soft landing vs recession, with the mentionings of “recession” back at pre-COVID levels, while soft landing counts are on the rise, although pulling a bit back from recent highs.

6. VIX Isn’t Broken. It Is Diluted by 0DTE Options That Have Shifted Target Risk Windows.

By Srinidhi Raghavendra, Mint Finance

  • Geo-Politics are tense. Monetary policies are in contraction. Rates are on hawkish pause. Inflation is far from tamed. Financial conditions remain tight. VIX should be anything but sanguine.
  • Any misjudgment across politicians, central bankers or businesses could send equities tanking or soaring. Yet the VIX is sending a calming signal.
  • VIX isn’t broken. It has been diluted by rise of Zero DTE (0DTE) options which have shifted risk pricing windows away from VIX target expiry range.

7. 5 Things We Watch: CBs, Eurflation, OPEC, Ifo, Dutch Politics

By Ulrik Simmelholt, Steno Research

  • We start off this week’s 5 Things We Watch by having a look at the reactions of CBs.
  • This is followed by talking about EURflation and the upcoming OPEC meeting and we then move on to talking about the Ifo numbers released last week while lastly finishing off with Dutch politics.
  • The Fed is the most plausible “pauser”.

8. 7 Reasons to Embrace the Melt-Up Into Year-End

By Cam Hui, Pennock Idea Hub

  • We wouldn’t go as far as to call the current circumstance a generational buying opportunity, but a rare “fat pitch” that comes along only once or twice per decade.
  • The current episode of strong breadth thrust off the market bottom in late October is a rare and clear, and extraordinary, trading signal of a major market bottom.
  • We believe investors should, at a minimum, embrace the likely melt-up into year-end and re-evaluate market conditions in January.

9. Vietnam Poised to Be Winner in Global Competition for Investments

By Manu Bhaskaran, Centennial Asia Advisors

  • Vietnam’s economy is regaining its footing after a difficult first half in 2023. Industrial activity and trade picking up, complementing still-healthy growth in the services sector. y. 
  • Despite the cyclical difficulties, foreign investments into Vietnam are on the up.  Advantageous economic geography and diplomacy are powerful pull factors. 
  • However, defective infrastructure, including in transport and utilities, limits the scope of Hanoi’s economic ambitions. These must be fixed if investments are to remain in Vietnam.

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

By Andreas Steno, Steno Research

  • 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! 

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Nov 26
0

Weekly Top Ten Macro and Cross Asset Strategy – Nov 26, 2023

By | Macro and Cross Asset Strategy

1. Steno Signals #74 – Did King USD Just Break?

By Andreas Steno, Steno Research

  • The sharp move in USDJPY and other USD pairs towards the end of last week has caught our attention and it arrives on the back of Powell letting go of the steering wheel on USD real rates.
  • The weekly credit data from the US economy keeps weakening and we are en route for a credit contraction in the US during Q1/Q2 next year.
  • Powell is probably right to let go of the tightness in USD real rates, but the question is whether he could be tempted to take back control in December in a final policy error?

2. KOSPI 200 and KOSDAQ 150 Rebalance Additions and Deletions Announced (December 2023)

By Douglas Kim

  • Korea Exchange announced KOSPI 200 rebalance additions and deletions today. There were 14 new additions and deletions (7 each).
  • Some surprises in KOSPI 200 rebalance included addition of Seah Besteel and deletion of HDC Hyundai Development. 
  • There were a lot more additions and deletions in KOSDAQ 150 (34 total additions and deletions). Among the KOSDAQ 150 additions included Neowiz, JNTC, Lunit, and Jeio.

3. The Land of Swaying Yen: Will The BoJ Intervene? How Will Yen Respond?

By Pranay Yadav, Mint Finance

  • Japan faces a raft of economic headwinds which shows up in Yen’s underperformance. BoJ’s job is not one to be envied given near-term issues plus structural challenges.
  • Since the start of Sep, the Yen has underperformed the most among currency majors declining to a 33-year low relative to the USD.
  • A frail outlook warrants continued loose monetary policy. However, that creates other problems forcing BoJ intervention to support the Yen.

4. Charting Beyond the Euro Area Headlines

By Thomas Lam

  • Available data through October implies that prevailing GDP growth is possibly tracking weaker than the prior quarter
  • A proxy of household saving propensity seems to be hovering around elevated levels partly because of greater uncertainty
  • Notwithstanding the recent disinflationary prints, the most persistent category of HICP inflation appears to be sticky at roughly twice the pre-pandemic average level

5. Fed’s Policy Rate Benchmark Under Scrutiny: Goodbye to the Federal Funds Rate?

By Said Desaque, DeSaque Macro Research

  • The poor results from the US Treasury’s latest 30-year bond auction highlights limited private investor appetite. Pressure on the Treasury to persist with high levels of short-term borrowing has increased.
  • Aggressive quantitative easing and interest on reserves have significantly lowered trading in the federal funds market by US banks, while Federal Home Loan Banks currently dominate lending.
  • The Fed’s policy rate could shift to the Secured Overnight Funding Rate. Functionality could be impacted by shifting perceptions about the collateral quality of Treasury securities due to high borrowing.   

6. Asia Geopolitics: Following Biden-Xi Meeting, Asia Is a Safer Place For Now

By Manu Bhaskaran, Centennial Asia Advisors

  • The Biden-Xi meeting signals a positive phase for lower geopolitical risks in the Asia Pacific. Beijing and Washington are prioritising handling its domestic challenges over ratcheting up competitive activity.
  • Taiwan’s presidential polls also motivate China’s “wait-and-see” approach as the Sinoskeptic DPP faces headwinds in maintaining its grip on power. 
  • Japan’s more nuanced strategy has gained it traction with Asian nations. It is why it is emerging as a real winner in the geo-political game in Asia.

7. How Far Can This Rally Run?

By Cam Hui, Pennock Idea Hub

  • The U.S. equity rally off the bottom in late October is characterized by strong price momentum and shows a high degree of upside potential.
  • Point and figure charting signifies measured objectives indicating percentage gains in the high teens or low 20s.
  • We also offer a series of sell signal triggers that indicate possible inflection points in risk/reward potential.

8. 5 things we watch: IFO, US rates, Earnings revisions, USD & Gasoline

By Andreas Steno, Steno Research

  • We start off this week’s 5 Things We Watch by having a look at the Ifo survey coming up this Friday in the midst of the Schwarze Null ruling.
  • This is followed by talking about US rates and Nvidia earnings and we then move on to talking about the USD while lastly finishing off with gasoline demand.
  • This week we are watching out for the following 5 topics within Global macro: IFO, US Rates, Earnings revisions, The USD, Gasoline.

9. Energy Cable #47: Price Always Leads Narrative

By Andreas Steno, Steno Research

  • Happy Monday to everybody from a cold and rainy Copenhagen.
  • We are now long crude oil again as we find the narrative too bearish given the fundamentals.
  • Before we start to talk about our crude oil case, we would like to highlight the volatility in post covid energy markets and how these have benefitted sellers in the futures markets more than buyers keeping storage costs constant.

10. Taiwan: Underowned, Yet Gaining on Peers

By Steven Holden, Copley Fund Research

  • The percentage of Global funds invested in Taiwan hits an all-time high of 57.8%.
  • Taiwan has been a key beneficiary of manager rotation alongside India, Argentina and South Korea over the last 6-months.
  • TSMC is the dominant stock holding, with 49.8% of funds holding a position and has hit record ownership among Global funds.

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Nov 19
0

Weekly Top Ten Macro and Cross Asset Strategy – Nov 19, 2023

By | Macro and Cross Asset Strategy

1. Increase in Trading of Inverse ETFs in Korea Post Temporary Ban on Stocks Short Selling

By Douglas Kim

  • In this insight, we discuss the increase in trading of inverse ETFs in Korea post the temporary ban on stock short selling.
  • From 6th to 14th November, individual investors made net purchases of 46 inverse ETFs worth 3.7 trillion won. Local institutions also made net purchases of 1.6 trillion won. 
  • On the other hand, foreigners net sold 5.8 trillion won worth of inverse ETFs. 

2. Steno Signals #73 – An Abysmal Impulse for 2024

By Andreas Steno, Steno Research

  • Happy Sunday and welcome to our flagship editorial! As per usual we take you for a chart-heavy guided macro tour around major asset classes.
  • Conclusions up front: – The credit impulse for 2024 looks abysmal– Rates volatility is likely going to rise sharply again– Equities still look (too) expensive on most parameters – JPY and CNY trends to continue worsening– Oil bulls have less to cheer about than Nat Gas bulls
  • Momentum in 2023 saw a positive impulse from 1) lower input costs for production due to lower commodity and energy prices than in 2022 and 2) Easing financial conditions due to higher multiples and an easing momentum in rates.

3. EUR Watch: Damned if You Do Until You Are Damned if You Don’t

By Andreas Steno, Steno Research

  • EUR assets will suffer if the activity levels rebound too quickly due to a lack of elasticity in the commodity/energy supply in Europe.
  • The EUR (and EUR assets) have suffered from a damned if you do, damned if you don’t a scenario in recent years as the scarcity of energy has taken center stage in the pricing of everything from the EUR, to EUR discount rates and EUR risk assets.
  • Low volatility in energy prices allows energy-sensitive industrials to brighten up the outlook, which is initially good for the EUR, but the problem is just that there is a potential negative embedded feedback loop in that journey.

4. Positioning Watch – The Cocktail of Heavy Logs in Both Equities and Bonds

By Andreas Steno, Steno Research

  • Hello everyone, and welcome back to our weekly positioning watch, which due to delays in the CFTC data has been postponed to today (data was available yesterday evening).
  • Almost as usual, markets find themselves in an odd position, as they await the next big event to move price action after Powell’s latest shocker a couple of weeks ago coupled with a severe sell-off in bonds in recent weeks.
  • Today’s CPI report will likely not change a whole lot, but equity markets may continue their run upward if we are right in our prediction from yesterday (more on that here).

5. Energy Watch: Time to Buy Oil Again?

By Ulrik Simmelholt, Steno Research

  • Conclusions up front: – We agree with OPEC that the demand side seems to be doing decent; paper markets are net short oil again.
  • Our model is approaching the buy zone despite the recent weakness seen in Oil.
  • The big risk to our model is a supply increase from an exhausted Saudi Arabian one-man-army.

6. USD CPI Watch: The tricky path to 2% despite a soft report

By Andreas Steno, Steno Research

  • Another CPI report, another preparation piece, where we as always share our thoughts on the coming report, what to expect next, and how far the Fed is from their all-important mandate of 2% inflation.
  • Main conclusions/notes upfront: 1) The path to 2% is tricky or almost impossible for the next 6 months.
  • CPI needs to average 0% MoM, which does not seem feasible.

7. Five Bullish Risk Reversals You May Have Missed

By Cam Hui, Pennock Idea Hub

  • We’re old enough to remember how the market was panicked about a U.S. recession and a rising term premium in the Treasury market.
  • Since then, a series of positive technical, macro and fundamental reversals have occurred to alleviate those concerns.
  • These reversals of an extremely bearish psychology are bullish for risk assets.

8. UK CPI Watch: No Path to 2% Unless Inflation Deflates on a Monthly Basis

By Andreas Steno, Steno Research

  • Welcome to our short and chart-packed preview of UK inflation out tomorrow morning.
  • Extreme base effects are at play in October due to energy price revisions in October 2022
  • Housing and household services are about to turn negative year over year 

9. US Inflation: First Take!

By Jeroen Blokland, True Insights

  • Disinflation Lives! US consumer prices were unchanged in October. As a result, headline inflation dropped to 3.2%. Core inflation declined to 4.0%, the lowest level in two years.
  • However, like last month, the underlying data look less upbeat. The 3-month annualized Core Services excluding Housing CPI has risen for four(!) consecutive months and reached 4.9% in October.
  • The disinflation narrative remains intact, opening the door for the Fed to proactively lower interest rates. But it remains doubtful whether Powell & Co. are truly inclined to do so.

10. 5 Things We Watch: Trump, Electricity, CPI, Crude Oil, Fixed Income

By Ulrik Simmelholt, Steno Research

  • This week we start out by looking at Trump’s chances of getting reelected then move on to European electricity markets after that we’ll discuss yesterday’s CPI print before moving on to crude oil and then ending with fixed income positioning.
  • President Biden’s approval ratings continue to sour as the country heads into potential Oil price headwinds and numerous unsolved foreign policy challenges.
  • The Biden camp has launched a number of PR offensives during 2023 – most notably the coining of “Bidenomics”, but none have managed to close the gap, which has even accelerated since summertime.

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