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By Bilal Hafeez 26-09-2019
In: post | Newsletter

Macro Hive Exclusives: New Risk Barometer / US Japanifying? / Late Cycle Worries

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(total reading time: 3 mins)

I created the Macro Hive website back in June and since then we’ve had over 12,000 visitors to the site. Most come for the quality of the content rather than the web design (we hope!), but nonetheless we’ve been busy working with an excellent web design company on a revamp. The new site is now ready and will be released tomorrow – from it, you can expect a sleeker interface and more intuitive content location. I feel like a host inviting guests to their newly refurbished house – I hope you like it! By the way, the website may be down for a few hours tomorrow as we switch over, so your patience is appreciated.

Onto our newsletter. We have four exclusives this week. I introduce the Macro Hive Risk Barometer, which is a more objective measure of investors’ risk appetite. We have the ever-excellent global economist Phil Suttle write on whether the US is ‘Japanifying’. Sam Bonney makes his Macro Hive debut with a note on late-cycle market dynamics – I used to work with Sam and he’s a top analyst. Then, we have my recent piece on how the US impeachment process could impact markets.

Finally, in my personal blog entitled, ‘If You Are Praised, Be Sceptical’, I summarise the eternal wisdom of Stoic philosopher Epictetus. Trust me, it’s better than therapy!



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What’s the Macro Hive Risk Barometer Telling Us? (1 min read) The past few weeks have been replete with drama, whether oil price surges, repo market disruptions and even US Presidential impeachment inquiries. Stock markets have stumbled but a more objective measure of market risk, the Macro Hive Risk Barometer, suggests we are far from “risk aversion”. Certainly, risk has increased, but we are not in the same territory as early August, when our measure was clearly in “risk aversion” territory.

(Bilal Hafeez | September 26, 2019)


US Set for Japanification? (4 min read) Does a parallel in central bank policy rates and 10-year bond yields between the US and Japan foreshadow a similar fate for the US economy? The current slide in US growth and increase in US net government debt does mirror Japan’s situation in the early 2000s. However, there are differences in equity prices, real effective FX rates, private sector savings rate and real estate prices.

(Phil Suttle | September 26, 2019)



Buckle Up for Late Cycle Worries (4 min read) There are three paths that the global economy might follow. The odds for an above-trend growth outcome is around 30% and highly dependent on aggressive monetary stimulus. Current market data suggests an around-the-trend growth performance. But the more likely outcome will be a transition to sub-trend growth scenario, especially as Europe and China are struggling.

(Sam Bonney | September 26, 2019)


Two Ways Impeachment Could Hurt Equity and Bond Markets (2 min read) Even though any impeachment process against Trump is unlikely to lead to an actual conviction. It could still impact markets. It could lead to weaker equity market performances through increasing political and economic uncertainty. Also, it could ironically hurt Biden’s bid for Presidency and increase the odds of seemingly market unfriendly Warren winning the Democrat primary.

(Bilal Hafeez | September 25, 2019)



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Which Countries Are the Biggest Boost or Drag on the EU Budget?


For details: Which Countries Are the Biggest Boost or Drag on the EU Budget?

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