Street Signals – Détails, épisodes et analyse

The Federal Reserve’s annual Jackson Hole Economic Symposium starts tomorrow. It takes on added significance this year, with an easing cycle seen starting next month, in the wake of softer economic data and a bout of market volatility. This year’s forum focuses on the effectiveness of the monetary policy transmission mechanism. Rising fears that the Fed is falling behind the curve and not easing quickly enough to ensure continuation of a soft economic landing would suggest that policy transmission has gone mostly as expected. Or has it? This week, Marvin Loh checks in with his thoughts on that question, as well as what message to expect, what actions the Fed and other central banks will ultimately take and when they might take them.

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After a burst of volatility, markets are settling. Is the turmoil over or was it the opening episode in a destabilizing series of events? We don’t know but there are metrics we can monitor to get a better sense of how asset and currency markets will behave in the coming weeks. Street Signals host Tim Graf walks through four different themes from State Street Global Markets' suite of proprietary indicators of investor behaviour, inflation and risk. Each can be observed daily, with implications for returns in equity, rate and FX markets in the balance.

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With elections in 63 countries, representing 40% of global population and GDP, the democratic process will see few years like 2024. The US election looms largest, with implications for a potential conflict in the Taiwan Strait and ongoing wars in the Middle East and Ukraine, all of which feed back into the involved economies and global financial markets. This week, from the sidelines of our Research Retreat in Boston, we catch up with Iris Malone, PhD and Director in AI and Data Science at GeoQuant, who takes us around the world, modelling risk in geopolitics and focusing on the probability of seismic changes for markets.

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This week, we kick off a series of podcasts recorded at or on the sidelines of our 2024 Research Retreats, taking place across North America, Europe and Asia over the next four weeks. And we do so live, without a net, for the very first time, and in front of an audience to boot. Three members of the Macro Strategy Team at State Street Global Markets present their top picks for how to play markets over the rest of the year. Dan Gerard, Marvin Loh and Ning Sun make their respective cases to the audience in a rapid-fire, Shark Tank-style presentation, with ideas as wide-ranging as how to think about US Financials, the US yield curve and the state of Emerging Market FX carry trades.

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China and India contribute more than a third to global population, but still only account for a quarter of global output. So, as their economies mature and their markets open more to outside investment, their respective growth and inflation stories increasingly matter for global investors. Flow dynamics are of particular interest, given the equity markets in both economies have been underinvested in for years. And, with the Chinese renminbi a low-yielding currency and the Indian rupee a high-yielder, many of most popular and profitable carry trading strategies in FX markets over the last 18 months hinge on the path these two currencies take. This week, we take a deep dive into the world's second and fifth-largest economies, with a special focus on the forthcoming Indian election results and their impact, with the help of four of our Macro Strategy and Trading colleagues in the region.

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Markets are back to all-time highs and volatility is normalizing, with the rate outlook for the remainder of the year coming into clearer focus. Is it too much of a good thing? Who better to ask than bond market guru, the creator of the MOVE index of implied interest rate volatility and managing partner at Simplify Asset Management, Harley Bassman. This week's conversation explores the Fed's easing cycle, the shift in policymakers' focus from inflation to the labor market and the overlooked importance of demographics. Harley also talks through the creation of the MOVE index, the implications that his view on rate volatility has for mortgage backed securities and why investors should avoid credit and duration risks. Check out Harley on Twitter, @ConvexityMaven, and at convexitymaven.com.

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Dynamics in today's currency markets are informed by historic events and trends that shaped the structure and of the global economy. Building on a lifetime of experience in formulating currency policy at the US Department of the Treasury and as US representative to the IMF, Mark Sobel, US Chairman at the Official Monetary and Financial Institutions Forum (OMFIF), joins the podcast to discuss many of the most far-reaching and relevant themes driving FX markets today. He details his thinking on the potential success of ongoing intervention in the Japanese yen, the centrality of the US dollar in trade and global finance and the history and current themes of RMB valuation and currency diplomacy.

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Outside of the Magnificent 7 tech stocks, profit warnings and unsettling forward guidance through Q1 earnings season have sparked a re-assessment of demand resilience. Commentary from consumer-oriented firms about waning pricing power and tighter margins looks troubling. Marija Veitmane, our head of equity strategy, returns with her take on a bifurcated earnings environment, where tech still trumps all but the outlook for consumer stocks, banks and sector rotation strategies is murkier. Peter Vincent, head of Trading in EMEA, is also back, with his macro spin on consumer and labor market trends, and where he sees rate markets and currencies in the coming months.

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April brought a reality check to markets after a stellar Q1, sparking demand for safety across assets and currencies. The higher for longer rate environment, together with signs of slowing growth and sticky inflation, gives rise to thoughts of future weakness in risk assets. Naturally, investors begin to question where best to take shelter. Are traditional safe havens as effective as they have been in past cycles? How do US Treasuries, the dollar and yen, long the stalwarts of safety, stack up? This week, Fred Goodwin returns to the podcast to discuss the challenges of selecting a suitable safe haven, the intricacies of safe haven currencies and which assets are most appealing to him right now.

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Lee Ferridge returns to the podcast to give his latest take on FX, interest rate and risk markets. Ever the road warrior, we focus first on the consensus and conviction calls from the dozens of client meetings Lee has done in recent weeks, before tackling the questions we are all contemplating in macro markets could the Fed's next move actually be a hike? Can the risk rally resume if that's the case? Is there any room for further rate divergence across G10? Long or short JPY? Is the carry trade over? It all gets answered this week.

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