Macro Strategist, SEB [email protected]
Stockholm, Sweden
Joined August 2012
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Tell me you’re stressed about the bond market without telling me you’re stressed about the bond market
Trump: We could have GDP of 10, 12, 15 times if they just leave us alone. Let interest rates go down. It’s a very unfair system.
They should drop interest rates because it means we have a strong country and it's all based on credit, meaning good credit, and we have the best credit and we'd pay off the debt very easily, very quickly.
The ECB is so afraid of repeating its policy mistake from 2021–2022 that it is about to make a new one.
🇪🇺 #ECB'S GOVERNING COUNCIL MEMBER SIMKUS COMMENTS IN VILNIUS - BBG
*ECB' SIMKUS SEES `AT LEAST ONE MORE' RATE INCREASE
*ECB'S SIMKUS SAYS IMPORTANT TO CAP INFLATION EXPECTATIONS
The divergence between Sweden and the rest of G10 is becoming more and more extraordinary.
The market is still pricing a full hike from the Riksbank this year. Doesn't make sense to me - as long as Hormuz opens soon.
The market has removed more than a full rate hike in the UK, EA and Sweden after today's ceasefire, but still expects 1-2 hikes before the end of the year.
Should central banks hike rates into an oil supply shock, which raises inflation and hurts growth?
The market certainly thinks so.
In the UK, despite weak economic activity and rising unemployment, the market has repriced the BoE from 2 cuts this year to 1.5 hikes(!)
The Brent/DME Oman spread is flashing stress signals even as Brent holds a relatively stable range this week.
If supply disruptions persist, watch DME Oman. It'll tell you where Brent is really heading.
Government bond yields are rising more than interest rate swaps in high-debt economies such as USA, UK and France. No safe-haven bid there.
The opposite is seen in more fiscally prudent Germany and especially Sweden. Interestingly Japan is also doing ok.
A prolonged disruption to global energy markets looks increasingly likely.
In our report on the Iran war, we lay out two inflation scenarios. In the nastier one, the first-order impact raises headline inflation to 4% in US and EA.
Read more here: research.sebgroup.com/macro-…
Is the US entering a productivity miracle?
Incoming Fed Chair Kevin Warsh thinks so, that an AI-led boom creates disinflationary room to boost growth AND cut rates simultaneously.
Q4 surprise reinforces supply-side economists like Warsh. But AI still has a lot to prove.
Sharp repring of G10 central banks as energy prices and inflation expectations surge.
- BoE: most sensitive to shifting inflation dynamics --> largest repricing.
- ECB: risk picture has shifted from cut to hike.
- Riksbank: cutting bias has almost been deleted.
Gustav Helgesson retweeted
GS: Replacing the IEEPA Tariffs with a 15% Tariff under Section 122 for Now Would Reduce the Increase in the Effective Tariff Rate Since the Start of 2025 from Just Over 10pp to 9pp
Gustav Helgesson retweeted
How to lose the 21st century to China:
1. Unilaterally disarm regarding the soft power competition by ending economic aid and international media agencies.
2. Impose tariffs irrationally on everyone.
3. Invade Greenland, break up NATO, and isolate the US from the entire world.
4. Defund universities.
5. Discourage the best and brightest from immigrating to the US.
6. Withdraw from international organizations, handing over their control to the Chinese Communist Party.
7. Foment polarization between Americans.
8. Stop supporting democracy abroad; just talk about power.
9. Weaken American democratic institutions at home.
🇸🇪🚀The SEK is on track for its strongest annual run ever against the dollar. To surpass the previous record set in 2003, USDSEK only needs to drop to 9.15 from the current 9.18.
