Macro Strategy Views

China has seen a sharp rebound after the successful opening of its economy in spring last year. Now its economy is slowing as the effect of the stimulus is fading. In this podcast we discuss the nature of the slowdown and what it could mean for the rest of the global economy and the financial markets. We also discuss the shift in geopolitical risk between China and the US with the Biden administration in office. Head of Global Macro Research Jakob Ekholdt Christensen chairs today’s podcast and he is joined by Chief Analyst and China expert Allan Von Mehren

In today’s podcast, we zoom in on the biggest tail-risk to the global economy in our view: If vaccines turn out not to be as effective as expected in the face of new virus mutations, then it is likely restrictions will have to remain in place for much longer than ‘just’ this spring. In our view, the implications of this scenario could easily be a fall in global equity markets of 15-20%, as the global economy could face another ‘lost year’, even if governments and central banks try to step in and support economies again. Head of Global Macro Research Jakob Ekholdt Christensen chairs today’s podcast and he is joined by Senior US, UK and COVID-19 analyst Mikael Milhøj and Senior Equity Strategist Bjarne Breinholt Thomsen.

In today’s podcast, we zoom in on Europe. In 2020, Europe lived up to its old mantra of never wasting a crisis, undertaking far-reaching measures not only on the ECB side but also with regard to national and EU level fiscal policies in response to the COVID-19 crisis. Now one year later, we take stock of the current state of play in Europe: We assess the impact of the second COVID-19 wave, new leadership in Germany’s biggest party CDU, a government crisis in Italy and looming discussions of economic policies on the other side of the crisis. We conclude that both the European Commission and the ECB will go very carefully on a potential exit and see yields in Europe trading in a tight range in 2021, even as we believe US yields should rise further from their current levels. Head of Global Macro Research Jakob Ekholdt Christensen chairs today’s podcast and he is joined by Chief Strategist on ECB and Fixed Income Research Piet Christiansen.

In today’s podcast, we discuss the implications of last week’s surprising Democratic Party victory in Georgia. Near term, we expect a bigger fiscal support package, a stronger US recovery in 2021 and the Fed’s current stance to be challenged, as well as a stronger US dollar later in the year, on the back of the Democratic Party victory. We also discuss why the attack on the US Congress and political uncertainty in general had little impact on financial markets. Head of global macro research, Jakob Ekholdt Christensen, chairs today’s podcast and he is joined by Senior US analyst, Mikael Milhøj , and Senior FX Strategist, Lars Sparresø Merklin.

In today’s podcast, we discuss our 2021 outlook across macro, FX and equity markets. We expect the recovery to gain speed from Q2 and EUR/USD to head lower in 2021, while we believe higher US rates will not derail the equity rally. We also discuss why we believe Norges Bank will hike interest rates in 2021. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of International Macro Research Jakob Ekholdt Christensen, Chief Strategist Kristoffer Kjær Lomholt and Senior Equity Strategist Bjarne Breinholt Thomsen

In today’s podcast, we discuss the current state of the Brexit negotiations, what will happen in the event of a deal or no deal and why negotiations may start again within the next year if there is no deal. We argue that there is a decent chance of a Brexit deal within the next week – hear why. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Senior Analyst and Brexit expert Mikael Olai Milhøj.

In today’s podcast, we outline our framework for assessing environmental, social and governance (ESG) credit risk in corporate bonds in light of the EU taxonomy. We discuss physical and transition risks in the pulp and paper, shipping and real estate sectors. We discuss the winner’s curse in shipping and how long-term physical risks in pulp and paper and real estate may turn into short-term risks. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of Credit Research in Sweden Louis Landeman, Senior Norwegian Credit Analyst Bendik Engebretsen and Senior Swedish Credit Analyst David Andrén

In today’s podcast, we discuss the prospects for new vaccines emerging and the risk of a US lockdown. We view the risk to the global economy as much more balanced now, with a possible upside twist, despite it being likely the US will need to impose tougher restrictions to contain its third wave. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan von Mehren and Senior Analyst Mikael Olai Milhøj.

In today’s podcast we discuss what Biden’s win means for the USA’s relationship with China and what implications it has for economic policies. We discuss his transatlantic approach to China, the size of the COVID-19 package, and whether it will come before the end of the year. We also discuss the relief rally in equities and how much further it can go on from here. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by US economist, Mikael Olai Milhøj, and equity strategist, Bjarne Breinholt Thomsen.

In today’s podcast, we discuss the partial lockdowns in Europe and the US election. Europe is likely to contract in Q4 given the blow to certain service sectors but we believe that Europe’s downturn in Q4 will be much milder than that in Q2. If we have a divided US government, the COVID-19 stimulus package would be smaller. There is a significant risk that we will not know the next US president until a few days after the election, while it is very likely we will know the Senate election results on Wednesday morning CET. There is a risk of a contested result if the election is close but any election disputes have to be solved by 8 December. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by euro area economist Aila Mihr and US economist Mikael Olai Milhøj.

Today, we discuss why restrictions in Europe are likely to remain in place for many months but why the bar for broad lockdowns similar to those in the spring is high. We also discuss why fiscal and monetary policy are set to remain stimulative for a long time and how policymakers will have to factor inequality and crisis persistence into their reactions. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Economist Denmark Las Olsen.

Today, we discuss why we think the EU and UK are moving closer to each other in the negotiations, the difference between a deal and no-deal and the implications for financial markets. We also discuss the medium-term implications for the UK economy, whether the UK could become Europe’s Singapore and the implications of the US election. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Senior Analyst and UK economist Mikael Olai Milhøj.

Today, we discuss the scenarios for the global economy and what they imply for equities. We argue that growth will slow and risks are skewed on the downside but a possible double-dip recession in 2021 could ease in the later part of the year due to new stimulus and support from China. The balance of risks is for equities to head higher. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of Macro and EM Research Jakob Ekholdt Christensen and Senior Equity Strategist Bjarne Breinholt Thomsen

Today, we discuss the US election and the implications for the economy and equities. We discuss the degree to which a united democratic government would lead to a demand boost and how this compares with a republican sweep. We discuss the implication of the election for the US’s approach to China and how we believe it will affect global equities. Global Head of FI&C Research Thomas Harr chairs today’s podcast and is joined by US economist Mikael Olai Milhøj and Senior Equity Strategist Bjarne Breinholt Thomas.

Today, we discuss why we expect Norges Bank to lift the rate path this week, signalling a full rate hike by Q2 22. We argue why, from a risk-reward perspective, it makes sense to position for higher short-end and belly rates, while any NOK strength is likely to be short lived. We also discuss whether the Fed’s FAIT has implications for the Riksbank. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Strategist Kristoffer Kjær Lomholt and Chief Economist for Sweden Michael Grahn.

Today, we discuss what could drive much higher inflation rates over coming years. We discuss a fast recovery, the Fed’s change and its influence on the ECB, monetary financing of expansionary fiscal policies and a political shift to a progressive left in the US and Germany. Global Head of FI&C Research Thomas Harr chairs today’s podcast and is joined by US economist Mikael Olai Milhøj, Euroland economist Aila Mihr and ECB economist and FI strategist Piet Christiansen.

Today, we discuss whether the volatility experienced in particularly equity markets late last week is set to continue. Positioning and retail involvement suggest that more is in store but the macro-drivers - vaccine developments and Fed action – for the reflation theme to continue are still very much in place. We discuss the rotation dynamics in equities and the primary market’s influence on the secondary outlook in credit. Global Head of FI&C Research, Thomas Harr chairs today’s podcast and he is joined by Senior Equity Strategist Bjarne Breinholt Thomsen and Credit Strategist Mark Naur.

The phasing out of COVID-19 support measures is set to affect people and companies in the Nordic countries. We discuss whether the end of support schemes will lead to higher unemployment rates and bankruptcies in the region. Global Head of FI&C Research Thomas Harr chairs today’s podcast and is joined by Chief Economist Las Olsen and Head of Scandi Strategy Arne Lohmann Rasmussen

The reflation theme has dominated financial markets in recent months, driving stocks higher, depressing credit risk premiums and weakening the USD. However, over the past week inflation expectations dipped, the USD stabilised and nominal yields drifted lower. We discuss whether the reflation theme is now dead, or whether this is just a pause before the next acceleration. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Senior FX Strategist Lars Merklin and Credit Analyst Mark Naur.

The reflation theme is broadening, with higher yields and steeper curves. However, is the recent financial performance as good as it gets and how do future risks compare with current market pricing and thereby expected return? We argue that equities are not expensive and discuss the link between interest rates and equities. The vaccine and the Fed are set to drive risk premiums and returns across assets. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Senior Equity Strategist Bjarne Breinholt Thomsen

The market recovery is extraordinarily fast but this is also a very different crisis. The economic rebound is much faster than during previous crises, which is due to the nature of the crisis and the policy stimulus. We discuss whether it is time to change the crisis narrative and how we may think about the USD. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Strategist Jens Nærvig Pedersen.

This week, we discuss a systematic framework for analysing investments, which distinguishes secular trends from tactical asset views. In our view, the USD is a key driver of asset returns, which is often overlooked. We discuss whether we are at a secular turning point for the USD and what this implies for asset performance. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Senior Analyst Kristoffer Kjær Lomholt and Senior Analyst Lars Sparresø Merklin.

This week marked a clear worsening in the number of new COVID-19 cases in Texas, Florida and Arizona. Meanwhile, over the past month the global recovery has been faster than most people thought likely one or two months ago. The Nordics are outperforming the world, led by Norway and Denmark. We discuss the risk of a US-led virus outbreak derailing the recovery and the risk for the Nordics Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan von Mehren and Chief Economist Las Olsen.

The Fed learned the importance of explicit and aggressive forward guidance at an early stage in the GFC, tied either to specific dates or to economic outcomes. The current forward guidance is weak as it is neither explicit nor aggressive. Therefore, the Fed is eager to strengthen forward guidance. The guidance could target inflation above 2%, and involve asset purchases, the Fed funds rate and possibly yield curve control (YCC). It could cap 3Y UST yields at 0.25% with the purpose of reinforcing guidance on forward rates and asset purchases. We discuss the gains and pitfalls of such a policy. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Senior Analyst Mikael Olai Milhøj and Senior Analyst Jens Nærvig Pedersen.

The market is likely to price a higher chance of a fast recovery due to non-farm payroll, German stimulus and the ECB. We believe that investors should focus on opportunities where 1) solid fundamentals support an extension of the current rally (for example we have just lowered our target on short EUR/NOK to 10.00 from 10.50, and 2) there are catch-up opportunities, such as eurozone banking stocks where risk premiums are still elevated. We discuss the ECB, equity markets and EUR/USD. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast and he is joined by Chief ECB strategist Piet Christiansen, Senior equity strategist Bjarne Breinholt Thomsen and Senior FX Strategist Lars Merklin.

For the past couple of months, developments in COVID-19 have driven economies and markets. However, we are starting to see geopolitical risks returning, with US-China relations reaching a new stage following Beijing’s announcement of a new national security law in Hong Kong. We discuss the next legs in the US-China technological and trade war. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan von Mehren.

Since the dark period in March, when financial markets capitulated, volatility has eased tremendously and risky assets have rallied. The question is whether risk premiums are now too depressed, or whether the forceful actions taken by central banks in particular will extend the risk rally as recovery takes hold. We discuss equity and credit risk premiums in light of yield levels, cash flow uncertainty and Europe/US divergence. Global Head of FI&C Research, Thomas Harr chairs today’s podcast and he is joined by Senior Equity Strategist, Bjarne Breinholt Thomsen, and Credit Strategist, Mark Thybo Naur.

In our weekly Macro Strategy Views podcast, we discuss the webinar we had last week with Professor Richard Baldwin, in which we discussed globalisation and automation in light of the COVID-19 crisis. Mr Baldwin argued that globalisation will accelerate in the aftermath of the COVID-19 outbreak and that over the long run inequality will fall. We discuss the implications for inflation and the future of work. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of FX Research Christin Tuxen.

In our weekly Macro Strategy Views podcast, we discuss the political consequences of the crisis. The focus is shifting towards how the crisis will be more disruptive politically than most people expect. An escalation of geopolitical conflicts, such as US-China tensions, may be a trigger for a more prolonged crisis. We discuss the unstable equilibrium in the eurozone, where there are political risks that the ECB will suddenly hesitate and anti-EU sentiment on the back of the crisis. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of International Macro Research Jakob Ekholdt Christensen.

In our weekly Macro Strategy Views podcast, we discuss risk sharing and fiscal dominance in the eurozone, monetary financing and the next euro crisis. The lack of risk sharing in the EU and the explosion in government debt require monetary financing. The COVID-19 crisis is a real world experiment of MMT in the eurozone and elsewhere. We outline what we expect from EU institutions and the ECB. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Piet Christiansen and Senior Analyst Aila Mihr.

In our weekly Macro Strategy Views podcast, we analyse the latest coronavirus numbers, the implications for the global economy and easing market volatility. Over the weekend, there has been improvement in both the US and Europe in terms of the virus numbers. It looks to us as though European countries outside Italy are on track for a peak early this week and the US by the end of the week. Meanwhile, we are seeing an improvement in market sentiment following very aggressive central bank easing. We expect equities to head gradually higher over the coming three to six months. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan Von Mehren and Senior Equity Strategist Bjarne Breinholt Thomsen.

In our weekly Macro Strategy Views podcast, we discuss the recession being extraordinarily deep and much deeper than the worst months in the global financial crisis in 2008-09. However, there is still a chance that the recession will be short-lived. The key will be (1) how the virus numbers develop and (2) the political reaction function in terms of when politicians decide to end the lockdowns. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan Von Mehren and Chief Economist Las Olsen.

In our weekly Macro Strategy Views podcast, we discuss the recession and the lack of appropriate policy responses. With the exception of the Fed, we believe policymakers in Europe and US have not reacted forcefully enough to support their economies. Near term, the expected increase in virus numbers would be a substantial hit to the global economy. We discuss the expected length of the slowdown and what we will be looking out for. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of International Macro Research Jakob Ekholdt Christensen.

In our weekly Macro Strategy Views podcast, we discuss the price war in the oil market and the lack of an adequate policy response to the COVID-19 crisis. We believe that oil prices may fall to the January 2016 low if Saudi Arabia scales up production. The COVID-19 crisis is likely to get worse before it gets better, as the policy response remains inadequate. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan Von Mehren and Senior Analyst Jens Nærvig Pedersen.

In our weekly Macro Strategy Views podcast, we discuss the base case, best case and worst case for the global economy. We expect a sharp global slowdown near term but stabilisation and recovery later in the year. However, the risk of a global recession has increased sharply and near-term policy responses are key. Short term, risks are skewed on the downside for equities. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Chief Analyst Allan Von Mehren, Head of International Macro Research Jakob Ekholdt Christensen and Senior Equity Strategist Bjarne Breinholt Thomsen.

In our weekly Macro Strategy Views podcast, we argue that investors should treat foreign exchange as an asset class and we discuss a framework for analysing FX markets. This makes a lot of sense for, in particular, real money funds to manage currencies increasingly actively. Over the short to medium term, capital flows determine exchange rates. Global Head of FI&C Research Thomas Harr chairs today’s podcast and he is joined by Head of FX Research Christin Tuxen.

In our weekly podcast, Macro Strategy Views, we discuss the outlook for the US dollar and equities. In our view, the US dollar will stay strong until the US economy enters a recession. This has important cross-asset implications, particularly for the oil price, equities and interest rates. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast and he is joined by our Chief Equity Strategist, Mattias Sundling, and our cross asset strategist, Kristoffer Kjær Lomholt.

In our weekly podcast, Macro Strategy Views, we discuss the outlook for respectively credit markets and Norway in light of recent events. We expect HY credit spreads to narrow further on a constructive macro backdrop and positive equity sentiment. We believe the market is too negative on Norway as the tight labour market and high wage growth will support higher short-end rates and a stronger currency. Global Head of FI&C Research, Thomas Harr chairs today’s podcast and he is joined by Mark Naur, Credit Strategist, and Kristoffer Kjær Lomholt, Norway strategist.

In our weekly podcast, Macro Strategy Views, we discuss the implications of the coronavirus for the Chinese economy, global economy and markets. We expect a sharp fall in Chinese data in coming months followed by recovery. Asia will be hit hard with smaller implications for Europe and US. We expect equities will stabilise over the coming months before heading higher. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast and he is joined by Allan Von Mehren, China economist, Mikael Olai Milhøj, US economist, and Bjarne Breinholt Thomsen, equity strategist.

In our weekly Macro Strategy Views podcast, we discuss the implications of the coronavirus for the Chinese economy, the risk of a US-Europe trade war and the market implications. In our view, the Chinese economy is likely to take a hit and GDP could be reduced by up to one percentage point near term. Europe is picking up but a Chinese slowdown and the risk of a US-Europe trade war could weigh on sentiment. Global Head of FI&C Research Thomas Harr chairs today’s podcast, while our Chief Analyst on China Allan von Mehren, our Euroland economist Aila Mihr and FX strategist Lars Merklin join him

In our weekly podcast, Macro Strategy Views, we discuss the implications of the US-China trade deal, the sustainability of the global recovery and the ECB’s likely response. Europe may lose out with China buying US goods, but the improvement in the global cycle will dominate. We discuss the details of the ECB’s forward guidance and the strategic review. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast while our Chief Analyst on China, Allan von Mehren, and our ECB strategist, Piet Christiansen , join him.

In our weekly podcast Macro Strategy Views, we discuss the record-high syndicated debt issuance last week, the outlook for this week and the implications for euro markets. The positive equity sentiment should support credit spreads. Bund ASW is likely to widen again, while we are constructive on periphery spreads. Global Head of FI&C Research Thomas Harr chairs today’s podcast, while our chief strategist on EUR covered and financials Sverre Holbek and our Chief Fixed Income strategist Jens Peter Sørensen join him.

In our weekly Macro Strategy Views podcast, we discuss the details of the US-China trade deal and the implications for the global economy. In our view, there are several weaknesses in the Phase 1 trade deal, which could mitigate the uplift in confidence, manufacturing and investment. Global Head of FI&C Research Thomas Harr chairs today’s podcast, while our China and trade war expert Allan von Mehren joins him.

In our weekly podcast, Macro Strategy Views, we discuss the economic and financial performance in 2019 and the outlook for 2020. Real money funds are having a strong year, mirroring the stellar returns of financial assets. We discuss why 2020 will be more challenging despite better growth. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast. He is joined by Head of FX Research, Christin Tuxen, Head of International Macro Research, Jakob Ekholdt Christensen, and ECB strategist Piet Christiansen.

In our weekly Macro Strategy Views podcast, we zoom in on China and discuss the US-China trade war, US-China decoupling and the Chinese growth outlook. Head of International Macro Research Jakob Ekholdt Christensen talks to our China economist Allan von Mehren, who has just returned from a trip to China collecting fresh impressions on these topics.

In our weekly Macro Strategy Views podcast we discuss the FX winners and losers from cross-asset rotation. We discuss the importance of equity and fixed income flows for the broad USD and the implications for Scandi currencies. Global Head of FI&C Research Thomas Harr chairs today’s podcast, while our Head of FX Research Christin Tuxen joins him

In our weekly Macro Strategy Views podcast, we discuss the drivers of the cross-asset rotation with higher equity prices and higher yields. The first leg higher was driven by the reduction of tail risk related to trade war and Brexit in addition to stretched risk premiums. Whether the trend extends will depend on the economic cycle. We discuss the outlook for the cycle and asset implications. Global Head of FI&C Research Thomas Harr chairs today’s podcast, while Head of International Macro Research Jakob Ekholdt Christensen joins him

In this week’s edition of Macro Strategy Views, we ask whether the recent rise in yields is sustainable. Some of the reasons behind the uptick – notably markets having second thoughts regarding the ECB’s commitment to easing - lead our fixed-income strategists to stress the risk of another dip in, notably, bund rates. This said, the introduction of tiering last week went smoothly and it is now up to new ECB Chair Christine Lagarde to show the way ahead. Finally, we also look at what has - and will - drive Scandi FX ahead of year-end, with self-fulfilling prophecies arguably haunting, in particular, the NOK in recent years. Head of FX Research Christin Tuxen chairs today’s podcast and Head of FI Research Arne Lohmann Rasmussen and Senior FX Analyst Kristoffer Kjær Lomholt join her.

In our weekly podcast, Macro Strategy Views, we discuss the rotation in asset performance and the silent change in central banks’ reaction function. Since early September, equities and in particular European bank stocks have outperformed fixed income. This partly reflects geopolitics. However, the concerns about the reversal yield raised by some central banks have lifted short-term yields and banking stocks. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast while our Equity Strategist, Bjarne Breinholt Thomsen, joins him.

In our weekly podcast, Macro Strategy Views, we discuss the Riksbank and the ECB meetings this week. We believe the Riksbank will postpone the planned rate hike in December due to low inflation and falling inflation expectations. With regards to the ECB meeting, the focus will be on the recent public disagreement in the Governing Council. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast while our Chief Economist in Sweden, Michael Grahn, and our ECB strategist, Piet Christiansen, join him

In our weekly podcast, Macro Strategy Views, we discuss the recent developments regarding Brexit and the US-China trade deal. We still believe that a Brexit extension and a snap election are the most likely outcome, while the US-China trade deal is not a game changer. Last week’s geopolitical rally in markets is likely to fade this week. Global Head of FI&C Research, Thomas Harr, chairs today’s podcast. Our UK and US economist, Mikael Olai Milhøj, joins him.