Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Macro Monday (week 11): QE for life?
Kay Van-Petersen
Global Macro Strategist
Global Macro Strategist
Summary: Last week's European Central Bank meeting was a big one, as it confirmed that the European economy is structurally unable to attain 'escape velocity' from quantitative easing... and it's not just Europe, either.
Click here for the full PDF edition of Macro Monday (week 11): QE for life?
We’ve been calling for a tactical correction in equities – a risk-off move – for some time now, and we are finally getting there. I think we have further to run to the downside, as well, especially as the Xi/Trump summit date keeps getting pushed back.
Last week's European Central bank outing was a big deal, as it basically underlined that escape velocity from quantitative easing is not attainable (something we’ve been talking about for ages), and that holds true for central banks globally.
All this time, we thought the Federal Reserve was setting the benchmark via its move towards normalisation, but it actually has been the Bank of Japan, whose balance sheet is 100% of GDP, that is the bellwether. It's just a matter of time before the ECB and eventually the Fed go back to the balance sheet financial engineering game.
It will take a while to play out and there is a potential US summer inflation tantrum that might complicate things, but its QE for life and a thirst for yield at all costs that will soon resume. Bear in mind this is post-2017 and 2018, two years that saw the best global growth in over a decade at the tail end of the longest business cycle in modern history. Also? We are +$250 trillion in debt, up from $175trn at the time of the great financial crisis.
For those that may have missed it, check out Saxo's Quarterly Outlook on the Global Policy Panic. Also take a look at Saxo FX Head John Hardy's latest FX Breakout Monitor, as well as his take on the ECB meeting.
Finally, be sure to review Saxo Chief Economist Steen Jakobsen's take on Draghi's statement as well.
Wishing everyone a profitable and growth-filled week ahead – comments, feedback and high conviction trades are always welcome.
We’ve been calling for a tactical correction in equities – a risk-off move – for some time now, and we are finally getting there. I think we have further to run to the downside, as well, especially as the Xi/Trump summit date keeps getting pushed back.
Last week's European Central bank outing was a big deal, as it basically underlined that escape velocity from quantitative easing is not attainable (something we’ve been talking about for ages), and that holds true for central banks globally.
All this time, we thought the Federal Reserve was setting the benchmark via its move towards normalisation, but it actually has been the Bank of Japan, whose balance sheet is 100% of GDP, that is the bellwether. It's just a matter of time before the ECB and eventually the Fed go back to the balance sheet financial engineering game.
It will take a while to play out and there is a potential US summer inflation tantrum that might complicate things, but its QE for life and a thirst for yield at all costs that will soon resume. Bear in mind this is post-2017 and 2018, two years that saw the best global growth in over a decade at the tail end of the longest business cycle in modern history. Also? We are +$250 trillion in debt, up from $175trn at the time of the great financial crisis.
For those that may have missed it, check out Saxo's Quarterly Outlook on the Global Policy Panic. Also take a look at Saxo FX Head John Hardy's latest FX Breakout Monitor, as well as his take on the ECB meeting.
Finally, be sure to review Saxo Chief Economist Steen Jakobsen's take on Draghi's statement as well.
Wishing everyone a profitable and growth-filled week ahead – comments, feedback and high conviction trades are always welcome.
Quarterly Outlook
-
-
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
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
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
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
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
Peter Garnry
Chief Investment Strategist
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...
Disclaimer