Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Macro Digest: FOMC marginal change is big deal
Steen Jakobsen
Chief Investment Officer
Summary: Fed Minutes shows conditions in place to taper.
Saxo view: Fed still looks at when to start, but there is majority if not consensus that the QE needs to end by H2-2022. This is an extension of Althea argument early in the summer: Too much liquidity means Fed needs to act faster and earlier relative to normal conditions. We see a number of Fed governors confirming this path, and this is bad news for convexity and rate sensitive stocks as the tail-wind will disappear faster. Of course, there is still overall the issue that growth and overall financial conditions is deteriorating in real economy.
Market: US stocks markets has “broken down” on charts, fixed income is starting to price “stag-flation light”. (Low growth and medium term inflation) which mean FI for now remains unchanged. (Consensus on inflation remains that its “temporary”...)
Action: Seasonality in VIX, charts, and FOMC marginal change means Volatility should be bid. Looks to hedge through buying of puts or outright buying volatility ETF (VIXM US Equity or LVO IM Equity could be used).
As per my latest macro presentation – the gap between Fed “official” view on inflation and their communicated view... now closing, as predicted by their DOTS below:
Seasonality in VIX:
A few charts…
- NAS – Momentum broken down
- WTI – Oil – proxy for global growth broken down
- Copper – proxy for global growth broken down
- AUDJPY – The ultimate RISK indicator – broken down hard… (AUD is small open economy with big commodity + China exposure) – JPY is the world largest saving base (safety)
Latest Market Insights
Quarterly Outlook
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Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
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Charu Chanana
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As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
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Quarterly Outlook
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Ole Hansen
Head of Commodity Strategy
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Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
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Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
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