Read on the Trading Floor - 21 Mar 2024
Today’s focus… CB’s don’t stand in the way of ATH…
Macro Themes At Play
Theme 1 - SNB / BoE / Norges
Theme 2 - Animal Spirits
Theme 3 - China Rebound
Further reading and listening of note
Theme 1 - SNB / BoE / Norges
SNB deliver the first major surprise of the week, getting ahead of even the most dovish market expectations. Many saw this cut occurring at their next meeting, not today so CHF is off 130bps into the close. BoE's two hawkish holdouts have dropped their protest vote and now no longer see hikes whilst Norges stayed the course and gave little away.
Bloomberg - Switzerland Surprises With Rate Cut, Moving Ahead of ECB and Fed
ING - Bank of England sticks to the script and keeps rates on hold
Nordea - First cut most likely in September according to the Governor
Theme 2 - Animal Spirits
CB policy doesn’t stand in the way of ATH as JPow & Co are worried about high real rates, BoJ are still buying unlimited bonds, assets are reflating and scarcity remains a key constraint as $$$ chase "real" homes as hedges for the printing press... ARK, QQQ, Gold, SPX ... printer is still on and policymakers don't want to stand in the way of the party. We're living in a goldilocks simulation. 3 cuts despite raising growth forecasts, AI productivity gains and China impulse now supporting the RoW. What a happy place the market has found itself in, unless you're an FX trader as pairs remain moribund relative to the fun being had in the equity (Reddit explosive IPO) and crypto pits.
Steno Research - Head fake reflation incoming!
The Gryning Times - Record Highs
The Next Economy by Florian Kronawitter - A Dovish Powell
Rabobank - FOMC Post-Meeting Comment March 2024
Theme 3 - China Rebound
With copper, oil and gold leading the commodity sector higher, the tailwind currents of Chinese momentum (incremental targeted support) as well as a dovish Fed are driving a rebound in all assets. However, with the world focused on JPow and his dot plot, has China quietly turned a corner from its Q1 nadir?
Steno Research - Chinese Momentum: Driving Markets or a Crowded Consensus?
Steno Research - Macro Nugget: China is booming!
UBS - What should investors do with their allocation to Chinese equities?
SCMP Analysis - Xi-Putin honeymoon at risk as Chinese flood into Russia
Axios - U.S. wins China’s support on UN’s first AI resolution, securing its success
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Top Pieces
Discovered on Harkster.com
ING - AI will fundamentally transform the job market but the risk of mass unemployment is low
Nordea - EM Traffic Light March 2024
Reuters - Bank of Canada says quantitative tightening should end in 2025
FT - The world needs reminding — governments are not good at picking winners
AlphaPicks on Wall Street - Apple Might Not Grow On The AI Tree
Fortune - Apple hit with massive antitrust case from DOJ, 16 states after 5-year probe into smartphone market
Seeking Alpha - The United States v Apple part 3
The Bear Cave by Edwin Dorsey - More Problems at Hershey (HSY)
Bloomberg - What Ireland Prime Minister Varadkar's Exit Means for Political Landscape
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