In today’s briefing:
- What Do They Actually Mean by Inflation?
- EM by EM #33: Early Hikers = Early Steepeners?
- Macro Regime Indicator: What Technically Rising Liquidity Means for Your Portfolio
- EIA Watch: ALL TIME HIGH Oil demand, but so what?
- CX Daily: China-Latin America Ties Deepen Amid Boom in Cross-Border Auto Trade, E-Commerce
- Greek Economy – Quarterly Macro Note
- When Rising Real Rates Are Not Dovish
What Do They Actually Mean by Inflation?
- Not too long ago, the Fed Chairman forced us to focus on a very specific inflation figure, the 3-month annualized Core Services ex-Housing CPI. But not anymore.
- Perhaps this is because of the fact that this measure has risen for four consecutive months and reached 4.9% in October, significantly higher than both headline and core inflation.
- Another inflation metric has faded into the background. Powell’s inflation measure to justify a 0.75% hike back in 2022 rose to its highest level in 15 years in November!
EM by EM #33: Early Hikers = Early Steepeners?
- The early hikers club comprising e.g. Brazil and Mexico could be a decent steepener trade from here as long as FX vol remains relatively muted
- Receiving rates in Brazil, Poland or India amidst this global bond party makes sense
- As markets have outpaced central banks and vanilla economists in pricing in future rate cuts while eagerly purchasing bonds, the question that arises is how to effectively navigate this transition from a period of rapid buying to an anticipated rate cutting cycle in the emerging markets.
Macro Regime Indicator: What Technically Rising Liquidity Means for Your Portfolio
- With the turn of the calendar, it’s once again time for our monthly assessment of the current and upcoming macroeconomic circumstances.
- To carry out this evaluation, we utilize two critical tools: our Macro Regime Indicator framework and the interactive Structural Asset Allocation Model.
- These integrated resources enable us to establish a portfolio allocation that is empirically supported, taking into account the prevailing macroeconomic conditions and the driving factors within financial markets.
EIA Watch: ALL TIME HIGH Oil demand, but so what?
- Welcome to our weekly EIA watch, where we look at the implied energy demand numbers in the US economy and pair them with trends on the supply side.
- Price action remains abysmal in US energy markets (if you are bullish that is), and we are admittedly caught wrong-footed here after otherwise strong price action ahead of the OPEC meeting last week.
- Conclusions up front:– Weekly numbers on Oil demand reached an ALL TIME HIGH in week 48– Nat Gas flows trends were largely reversed towards the end of the month and now look normal– Congestion is still rising compared to usual seasonal patterns meaning that the transportation fuel demand is strong– Unless the EIA numbers are 100% out of whack with the reality, the US demand side is NOT behind the weakness in energy space. Let’s have a look at the details.
CX Daily: China-Latin America Ties Deepen Amid Boom in Cross-Border Auto Trade, E-Commerce
- China-Latin America / In Depth: China-Latin America ties deepen amid boom in cross-border auto trade, e-commerce
Social security /: China to allow social security fund to buy domestic pension products, futures
Citic /: China picks new party chief for Citic Group
Greek Economy – Quarterly Macro Note
- In 2022, Greece experienced a significant rise in its GDP growth, as Real GDP (2015 Prices) reached €190.65 billion, reflecting a 5.56% increase compared to the previous year.
- Progressing onward, the OECD, IMF, and EU have forecasted average growth rates of 2.34% for 2023 and 1.92% for 2024.
- Despite steady increases in nominal values of Public Debt, as indicated by both ELSTAT data and IMF-EU Commission projections, there holds a favorable aspect in the declining Debt-to-GDP ratio based on projections.
When Rising Real Rates Are Not Dovish
- Some unrealistically academic policymakers worry that rising real rates from disinflation will excessively tighten monetary conditions. We firmly believe they are mistaken.
- Cost shocks eroded disposable income, but this real income and expenditure squeeze is fading. The income channel is far more important than the interest rate one.
- Uncertain policymakers should rely more on the data than misapplied theories. Resilient demand and persistent inflation would tell them to wait longer before cutting.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
