Saxo Market Call

We have crossed the geopolitical Rubicon

Today's slide deck: https://bit.ly/3BDgmGe   -

Today we discuss the fresh market deleveraging triggered by Russian President Putin's recognition of the self-proclaimed republics carved out of eastern Ukraine, a move that was preceded by belligerent rhetoric that suggests that we have severed any chance at a diplomatic approach to the situation from here. The next critical step will be the nature of the sanctions from the US, the EU and UK and the degree to which these feed any further disruption for Russia-exposed entities and for the oil price. Elsewhere, we look at rising credit spreads, key equity stories and the focus on Europe and particularly Germany with the current geopolitical backdrop and more. Today's pod features Althea Spinozzi on fixed income, Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

The fog of geopolitical tensions

Today's slide deck: https://bit.ly/3JEoZ6j   -

Today we look at the latest attempt by the market to piece together a rally on the hopes that a Biden-Putin summit is in the works, while  wondering what could be discussed that hasn't already been in any new talks and generally bemoaning the scale of noise in the current situation over Ukraine relative to the signal. Elsewhere, earnings season marches on, but largely winds down this week. We maintain a very defensive stance here as we await further developments, with the Fed even able to surprise on the hawkish side again if it would like to as the market has unwound most of its expectations for a 50-basis point lift-off at the March FOMC meeting.  

Intro and outro music by AShamaluevMusic

Pozsar urges the Powell Fed to create a ”Volcker moment”

Today's slide deck: https://bit.ly/3H1Hi3z   -

Today features Saxo CIO Steen Jakobsen as we look at the latest Russia-Ukraine headlines shaking up markets and whether there is much signal in the overall noise. More importantly, we discuss the "talk of the town" yesterday after the very influential Zoltan Pozsar (currently of Credit Suisse, but a towering figure in global finance after he helped coach the Fed and the US treasury through its response to the global financial crisis) wrote a short piece exhorting the Fed to get creative and craft a "Volcker moment". Such a moment would be an effort at tightening financial conditions by rattling global asset markets  rather than merely signaling a brutal series of rate hikes, which so far have tightened conditions very little and risk merely bringing forward a recession. John J. Hardy hosts.

Intro and outro music by AShamaluevMusic

Back to square one on geopolitics. Fed expectations recede.

Today's slide deck: https://bit.ly/3BskEAc   -

Today we look at Fed expectations ratcheting lower still despite a very strong January US Retail Sales report and a non-dovish set of FOMC minutes, an indication that the market felt it had taken Fed expectations too high recently (also making it easier now for the Fed to surprise again on the hawkish side). We look at the need for the Fed to steepen the yield curve and the difficulty it may find in doing so, the impressive run back higher in gold and the next levels to focus on there, UK yields and the next steps from the Bank of England and more. Today's pod features Althea Spinozzi on fixed income, with John J. Hardy on FX and hosting.

Intro and outro music by AShamaluevMusic

The Fed must hike until something breaks

Today's slide deck: https://bit.ly/36kgkrl    -

Today features Saxo CIO Steen Jakobsen as we discuss the market's possible overreaction to signs of a de-escalation in the Russian position on Ukraine, how quickly rising yields will again dominate the narrative even if the Ukraine situation fades as a factor, and why the Fed will have to trigger a recession, i.e., "break something" before we can expect any new round of easing, as well as possible time frames for an incoming recession. A look at upcoming key earnings results and macro calendar highlights as well, with the FOMC minutes of the January meeting up late today. John J. Hardy hosts.

Intro and outro music by AShamaluevMusic

Geopolitics headlines improve, but here comes fresh yield spike risk?

Today's slide deck: https://bit.ly/3gNULS0   -

Today, we look at the latest headlines from the Russia-Ukraine showdown improving the tone for risk sentiment as German Chancellor Scholz is in Moscow today for talks with Russian president Putin. We discuss the viciously flattening US and UK yield curves, the time window possibly closing soon for a Fed emergency rate hike, and where we are looking next for yields. We also note the deteriorating situation for credit, a vital component of financial conditions. The strength in gold, earnings and macro calendar and more in today's pod, which features Althea Spinozzi on fixed income and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Russia-Ukraine headline risk added to already volatile mix

Today's slide deck: https://bit.ly/3rOGGdq   -

Today, we look at the impact across markets after Friday saw the US warning of an imminent Russian invasion of Ukraine, an intention Russia denies. German Chancellor Scholz is headed for Kyiv today and to Moscow tomorrow for talks. The headline risk has been ratcheted sharply higher with the latest escalation in tensions, and market participants will need to tread carefully. We also look at Russia's global weight in key commodities and look at the event risk calendars for the week ahead, as traders will also struggle to disentangle geopolitical tensions with concern on how rapidly policymakers intend to tighten financial conditions. Today's pod features  Ole Hansen on commodities and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic

Bracing for possible Fed emergency hike

Today's slide deck: https://bit.ly/3Bck6OG  - 

Today, we look at the hot US January CPI data hitting the markets yesterday, with an interesting attempt at a whiplash inducing bounce in sentiment just after the data release dealt an initial blow to sentiment as more Fed hikes were priced into the forward curve. Then markets turned south again when St. Louis Fed President and FOMC voter Stephen Bullard later administered a hawkish broadside with thoughts on an emergency Fed rate hike, a rapid path to 100 basis points of hikes and an imminent start to quantitative tightening. We also look at the impact on commodity markets from yesterday's developments and the Bank of Japan doubling down for now on its yield-curve-control policy and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities, and John J. Hardy hosting and on FX.

Intro and outro music by AShamaluevMusic