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  1. Markets to Watch: Will the Fed React to CPI Revisions?

    Bilal Hafeez, Viresh Kanabar

    Summary In the US, Friday brings seasonal factor revisions to the CPI. These could impact the path of the FFR. Currently Powell seems set on no rate cut in March. Europe and the UK hear from central bank policymakers and see several key surveys updated, including the services PMIs. Elsewhere, a slew of central bank […]

  2. Markets to Watch: Bonds Beware as QRA Emerges

    Bilal Hafeez, Viresh Kanabar

    Summary In the US, the Fed meets on Wednesday. We expect them to hold rates steady while preparing markets for a cut in March. In the UK, the BoE will likely hold rates unchanged on Thursday, taking a more dovish profile in the near term. January CPI is the main release of the week for […]

  3. Markets to Watch: PCE to Push Fed Into 50bp in March?

    Bilal Hafeez, Viresh Kanabar

    Summary In the US, we expect core PCE at 15bp on Friday. That would drop the figure below the Fed’s 2% target and increase ‘lowflation’ risks. Dominique still expects a 50bp Fed cut in March. The ECB should leave rates unchanged on Thursday. We see the first cut in June. In the $-bloc, the NAB […]

  1. Ep. 188: Macro Hive Webinar: (The Weekly Call Recorded 1 November 2023)

    Bilal Hafeez

    This week we have a special podcast episode for you! Listen to the Macro Hive Pro Markets Webinar and hear the key views of our leading researchers on their respective markets.

  2. Momentum Models Remain Bearish on UK Rates

    Bilal Hafeez, Ben Ford

    Momentum models (-0.8% WoW) registered negative returns across FX (-0.4% WoW), rates (-1.4% WoW) and equities (-1.0% WoW). 

  3. Momentum Models Bullish USD But Room to Increase Conviction

    Bilal Hafeez, Ben Ford

    Rates momentum models (+0.4% WoW) outperformed FX and equity momentum models (-0.1% WoW) over the past week. Rates momentum models are the best-performing models over a three-month time frame (+3.4%). FX (+0.6%) followed while equity (-3.0%) struggled. 

Global Recession Risks Are Rising

Vasileios Gkionakis

The last few weeks have seen several material developments in global markets. Nominal and real yields at multi-year highs alongside soaring oil prices have recently added to existing trends (dwindling excess savings and contracting global trade), increasing the risk of a global recession. 

Momentum Models Signal Lower UK Yields

Bilal Hafeez, Ben Ford

Momentum models signal lower UK yields. This aligns with Henry’s bias in the front-end of the curve. They also agree with our bearish US rates bias. 

  1. Momentum Models Flag the S&P 500 to Underperform

    Bilal Hafeez, Ben Ford

    Momentum model signals sit in contrast to our view to fade CHF strength. They are also yet to get fully on board with our bullish USD basket trade (vs EUR, CHF and GBP).

  2. Two Reasons Why the Dollar May Struggle for Direction

    Vasileios Gkionakis

    As of 8 September, the dollar had risen by 4.8% since mid-July, its largest gain over a 41-day period since mid-October 2022. 

  3. Look for Idiosyncratic, Relative-Value and Carry Trades in FX

    Vasileios Gkionakis

    Idiosyncratic and relative-value (RV) trades are currently appealing. Look for monetary policy divergences (Bank of England repricing lower, rates re-pricing in CEE), sensitivity to ongoing muted Chinese growth, and energy prices.

Momentum Models Move Max Long S&P While Being Max Short 10Y Treasuries

Bilal Hafeez, Ben Ford

Momentum models are moving towards our view that GBP/CAD will trade lower over the next six months. They also back our bias to expect European equities to underperform US equities. 

Momentum Models Suggest the Increase in Yields Is Far From Over!

Bilal Hafeez, Ben Ford

Momentum models are moving towards our view that GBP/CAD will trade lower over the next six months. They also back our bias to expect European equities to underperform US equities.

  1. Momentum Models Flag US Rates to Underperform JGBs

    Bilal Hafeez, Ben Ford

    Momentum models back our view to be long 10Y JGBs vs 10Y USTs (target: -400bps) and long EUR/CHF. They also back our bias to expect European equities to underperform US equities. They disagree with our view for GBP/CAD to trade lower over the next six months.

  2. Momentum Models Continue to Expect FTSE-100 Underperformance

    Bilal Hafeez, Ben Ford

    Momentum models are supportive of our hawkish views for both the Federal Reserve and European Central Bank. They also support Ben’s view that there is little reason to turn short EUR/SEK yet.

  3. Momentum Models Heavily Bearish on USTs, JGBs, Bunds and Gilts

    Bilal Hafeez, Ben Ford

    Market Implications Momentum models are supportive of our hawkish views for both the Federal Reserve and European Central Bank. They also support Ben’s view that there is little reason to turn short EUR/SEK yet.

Momentum Models Support Long Bund vs UST Trade

Bilal Hafeez, Ben Ford

Momentum models support Mustafa and Henry’s view that there is value in being long 10Y Bunds vs USTs. They also support Ben’s view that there is little reason to turn short EUR/SEK yet.

Momentum Models Support Positioning for Dovish BoE

Bilal Hafeez, Ben Ford

Momentum models support Henry’s view that there remains room for relative BoE dovishness versus the ECB and the Fed, which he likes via a 2s10s GBP/EUR box and by being short 1Y1Y US OIS vs 1Y1Y SONIA.

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