Summary

Andreas Steno expressed confidence in the US economy's re-acceleration, attributing it to early green shoots in the manufacturing sector as well as a liquidity influx. This is expected to prompt the Fed to taper quantitative tightening, They highlighted a rotation in the portfolio towards assets linked to global market cyclicality, including South Korean assets, commodities, and cyclical FX pairs. Comparatively, the outlook for the Eurozone was more cautious. Forward-looking indicators suggested divergence between the US and Europe, particularly in wage growth and inflation, with the Eurozone facing challenges in reaching its inflation target. Andreas also highlighted trading opportunities in natural gas and oil markets with disruptions in shipping lanes and changes in output levels by OPEC+. Claus Venderby Hornsleth then presented on three of Steno Research’s systematic trading strategies: 1. Mean-reverting FX trading; 2. Analysing expected FX hedges from the real-money community; and 3. A Principal Component Analysis (PCA) tool for macroeconomic factors. These strategies aim to exploit short-term market movements and enhance understanding of asset price dynamics for macro bets.

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