Daily Brief Macro: Steno Signals #187 – Remember August & September 2024? Tariffs are to blame and more

• Friday’s bizarre scenes in the Oval Office will take some time to digest for all involved counterparties.
• I don’t feel in a position to judge either side, but I will use this analysis to assess the ramifications of the event.
• As a disclaimer, remember that I am European!Trump’s argument that the U.S. pays too much to the rest of the world is, in many ways, entirely correct—but also quite banal.

• Base metals, particularly copper, are sensitive to China specific tariffs, leading to a rise in copper prices in early 2025
• Near term market outlook is cautious due to supply and demand dynamics, with prices potentially pulling back towards $9,000 per ton
• Long term outlook for copper market tightening in 2025 due to slowing mine supply growth and modest deceleration in global demand growth, with potential risks in X Chinese demand.

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• Euro area inflation exceeded consensus expectations again in February, despite an ongoing drift up in forecasts, although the 2.4% outcome precisely matched our call.
• ECB easing anticipated a drop below target by now, so its disappointment should exceed any relief at the 0.1pp slowing, driven by French energy bills, after four straight rises.
• Wage inflation remains too fast to sustainably achieve the target, which should urge the ECB to slow its easing after cutting on 6 March. We still see June as the last rate cut.

• How We Traded Wheat Short Wheat prices saw a small revival over the last month.
• From the rect bottom the forward futures contract recovered almost 15%.
• During last week new selling pressure started to effect the market and led prices down again. 

• U.S. oil and gas rig count rose by one for the week ending 28/Feb, marking the fifth straight weekly gain and bringing the total to 593.
• For the week ending 21/Feb, U.S. oil production slightly rose to 13.50 million bpd from 13.49 million bpd last week.
• The number of active U.S. oil rigs fell by 2 to 486, while gas rigs rose by 3 to 102. Rig count in the Permian rose by one to 305. 

• Term premium in US macro picture and interest rates has fallen significantly over the past month
• Treasury Secretary’s comments indicating no changes in coupon auction sizes or debt profile have impacted term premium
• Recent concerns about weakening growth have led to market pricing in more Fed rate cuts, despite strong labor market and potential upside risks to inflation forecast

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Chinese buying concentrated on warehouse cargoes
• Arbitrage narrows for international cargoes on wintering 
• Gradual return of the tire makers expected 

• Last year 70% of the calls made money. This year we make another 43 investment recommendations, global, US, Europe, Japan and 8 Asian countries. 
• Our prediction that Bitcoin will become a US reserve asset under Trump is already playing out. 
• Stock market volatility will persist, with diverging performance and subdued  gains compared with 2024. Our top picks are the US, Japan, Taiwan, Korea and India and selectively China. 

• The past week saw insights on Arwana Citramulia (ARNA IJ), BFI Finance Indonesia (BFIN IJ), Raffles Medical Group (RFMD SP) and Yangzijiang Shipbuilding (YZJSGD SP).
• Brian Freitas published on Grab Holdings and Sea Ltd (SE US) and increasing foreign holdings, whilst Daniel Tabbush revisits Singapore Banks, with a further insight on the tech sector in Singapore.
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom, from across Southeast Asia.