Read on the Trading Floor - 27 Mar 2024
Today’s focus… Riksbank, China, EV’s and much more
Macro Themes At Play
Theme 1 - Riksbank the next to cut in Europe?
Theme 2 - China
Theme 3 - EV’s are no longer the must have accessory
Further reading and listening of note
Theme 1 - Riksbank the next to cut in Europe?
Another CB opening up for an early summer cut. Today's rate path indicates the board will be ready to move by June if not May and then deliver another cut in Q3. The end-point has also been rolled out and down, from previously 3.51% in Q4 2026 to 2.58% in Q1 2027. The ECB are looking like clear laggards relative to their regional cousins, SNB and Riksbank.
Nordea - Opening up for rate cuts
Bloomberg - Riksbank Opens Door to Possible Rate Cut Before ECB and Fed
Theme 2 - China
The world knows it needs a growth impulse from China, we've been waiting for it since the great covid reopening trade. For now, we're left with uncertainty, around the fix, around policy and it's not clear how open the economy is to FDI. However, in my career I can't remember the last time Xi was so open to foreign CEO's, rarely has he shown them the red-carpet treatment like this. It's in stark contrast to Ant Group's Jack Ma. Maybe there is a more structural change a foot for business in China.
FT - Will Xi’s manufacturing plan be enough to rescue China’s economy?
Bloomberg - Yuan (CNY USD) Traders Stumped as China’s Key Daily Fixing Signal Clouds Over
MacroVisor - What's changed in China?
Bloomberg - PBOC Chief Seeks to Deepen Currency Ties With Asian Economies
Bloomberg - Xi Says US CEOs Should Invest in China, Economy Hasn’t Peaked
Nikkei Asia - Yen depreciation swayed by China central bank's yuan guidance
FT - Xi Jinping tells US CEOs that China’s growth prospects remain ‘bright’
Theme 3 - EV's are no longer the must have accessory
Plug-in hybrids are dominating as manufacturers struggle to bring EV fleets to market at a profitable price. R&D budgets are a clear headwind to profitability at a time when the consumer wants the range of a petrol hybrid and governments are rolling back the EV tax credit support.
The MacroTourist - SELL THE AUTOS: SERIOUSLY, JUST TAKE THEM OFF YOUR SCREEN
FT - Chinese-made EVs set to take 25% of European market this year
FT - Nissan looks for partnerships to cut electric vehicle costs
Deep Knowledge Investing - Guest Post – Electric Vehicles Scar Our Environment – By Laks Ganapathi of Unicus Research
FT - China’s ‘battery king’ dismisses solid-state EV commercialisation as years away
Fortune - electric vehicles are creating a ‘halo effect’ for hybrids—and losing prospective customers to them
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Top Pieces
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PauloMacro's Substack - Liquidity Drains
Russell Clark - AMERICAN GODS
Bloomberg - Japan FX Chief Ramps Up Warning After Yen Hits 34-Year Low
Ecoinometrics - No top in sight for Bitcoin
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