Street Signals

Monetary and fiscal policymakers are pivoting to easing mode. In developed markets, the restrictive rate policies of the post-COVID period are reversing nearly everywhere. As importantly, China is engaging on multiple fronts to support demand in an economy still constrained by high debt burdens. It should all add up to a great environment for risk assets, right? Maybe, but as Michael Metcalfe, Head of Macro Strategy at State Street Global Markets points out, there are nuances. Drawing on a recently published research note, we discuss how, as Q4 begins, high expectations and divergent positioning across and within asset classes make for a less obvious opportunity set.See omnystudio.com/listener for privacy information.

The US Presidential election is six weeks away, polls are dead-locked and the most relevant questions for markets remain open. Which electoral barometers are of greatest relevance as Election Day approaches? Where are the post-election gaps in the two candidates' policy possibilities the widest? And which markets are most underpriced for the risks those gaps entail? Elliot Hentov, Head of Macro Policy Research at State Street Global Advisors, returns to the podcast with his unique and thought-provoking insights on all of those questions, and much more, as the countdown to November 5th rolls on.See omnystudio.com/listener for privacy information.

Greedflation - companies exploiting a high inflation environment to raise prices relatively more than costs - has grabbed attention and headlines in economics commentary, but the evidence to prove definitively whether it took place on a wide scale in the post-COVID period is not conclusive. This week, we chat with our academic partner Alberto Cavallo, professor at Harvard Business School and co-founder of PriceStats, about a new working paper in which he and his co-authors take a deep dive into cost and pricing dynamics during the pandemic years. They employ unique data sets and analysis to determine whether, where and when excessive mark-ups on goods prices took place along the supply chains during the high inflation years of 2021-2023.See omnystudio.com/listener for privacy information.

Experience in markets helps practitioners cope with the inevitable cyclicality of economic fundamentals and risk appetite. Combining the muscle memory of past cycles with new ideas and ways of thinking is crucial to lasting success. That's the lesson this week, as we talk to Chris Pizzotti, Global Head of FX Voice Trading at State Street Global Markets, about his formative experiences in trading and how they help him to think about the most pressing questions in markets today. Is volatility back for good or will it subside as quickly as it rose? How aggressive will the Federal Reserve, Bank of Japan and others be in signalling policy intentions this year? What does it all mean for the dollar, yen, rate markets and EM FX? All crucial questions for macro markets addressed on this week's episode. See omnystudio.com/listener for privacy information.

Markets dealt well with volatility in early August and got a boost from the Federal Reserve’s dovish message in Jackson Hole at the end of the month. But September is known for seasonal weakness and is kicking off with worries over global growth and a question of whether anticipated monetary easing is enough to sustain gains in bonds and equities. With these challenges in mind, Marija Veitmane, our head of equity strategy, is back on the podcast to discuss optimal asset allocation strategies for the rest of 2024.See omnystudio.com/listener for privacy information.

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.See omnystudio.com/listener for privacy information.

Markets are settling after a period of volatility, but questions remain about future stability. Key topics include four vital indicators that reveal investor behavior and inflation trends. Listeners get insights into the rotation between large and small cap stocks and ongoing tech stock fluctuations. The discussion also emphasizes the importance of analyzing institutional positioning to forecast market movements. As summer approaches, the implications for equity, rate, and FX markets are explored.

The volatility of the last two weeks can be ascribed to many events and raises more questions than answers. Was it a clear-out of crowded positions in illiquid summer markets or the early stage of a systemic financial event? Is the US economy’s soft landing still on track? Will recent moves in equities, rates and FX now reverse or form new trends? Peter Vincent, our head trading in London, joins the podcast to try and answer those questions.See omnystudio.com/listener for privacy information.

Quiet summer markets were disrupted recently by sharp moves in equities, as the long-standing strength of IT and communication stocks gave way to a surge in valuations for smaller companies. Such price action can be healthy. But where past episodes of market rotation came in a rising market, as volatility fell, the recent rotation in stocks came with wider ranges, higher volatility and a retreat in overall market performance. With stocks still close to all-time highs, we ask Cayla Seder from our Equity Strategy team in the Americas whether this is merely a healthy correction or the start of a worrying trend.See omnystudio.com/listener for privacy information.

Summer lulls in market activity are common, but this year's calm is unique. Interest rate, FX and volatility markets are rangebound despite jarring headlines and upheavals in politics, and the potential for binary market outcomes in response. The search for high conviction views seems more difficult than normal. That makes it a good time to get the perspective from someone with a day job of managing risk. This week, we speak with Dan Mazza, head of our US FX forwards desk, on where he sees interest rate and currency markets potentially underpriced for the uncertainties ahead.See omnystudio.com/listener for privacy information.