At Any Rate

Cocoa prices have sharply corrected, seeing a 20% monthly decline and nearing a 40% loss this year. Despite this, third-quarter grind data indicates demand may not be as weak as previously feared. A cautious industry is eager for price relief, although consumers may not see immediate benefits. Improved output from Ecuador and regulatory delays in the EU are also influencing market dynamics. Additionally, the podcast touches on trends in other commodities, including sugar and corn, as well as ongoing trade challenges.

Teresa Ho, Head of U.S. Short Duration Strategy at J.P. Morgan, joins Phoebe White to delve into the implications of Quantitative Tightening's potential end. They explore the recent spike in SOFR and repo rates, attributing it to T-bill supply and coupon settlements. Teresa highlights that the anticipated $20bn/month runoff may not significantly alleviate funding pressures. They also discuss the limited impact of QT's end on yield outlooks, along with insights into inflation markets and break-even rates amid fluctuating oil prices.

The discussion kicks off with the implications of the US government shutdown on dollar visibility and Fed clarity. Global growth indicators reveal mixed signals, with developed markets showing weakness while emerging markets hold steady. Tensions in US-China relations are explored, highlighting their impact on regional currencies. Surprising labor data from Australia and New Zealand prompts a look into upcoming policy reactions. Insights from the recent IMF and World Bank meetings shed light on dollar positioning and policy risks.

The discussion dives into the recent movements in European rate markets, including intriguing insights on the 2026 Euro-area sovereign issuance and the implications for demand. The hosts explore the European SSA market, highlighting seasonal trends and positioning strategies. Meanwhile, there's a focus on Scandi rates, addressing potential Riksbank cuts and Nibor dynamics. Inflation breakevens in both the euro-area and the UK are analyzed, shedding light on market expectations following recent shifts. Tune in for a wealth of financial insights!

The surprise election of Sanae Takaichi has sparked discussions on Japan's economic trajectory and the potential revival of Abenomics. Analysts explore Takaichi's cautious fiscal agenda and its implications for the Bank of Japan's independence. Attention shifts to currency movements, as positioning drove significant dollar-yen changes. Experts warn of a feedback loop between the yen's depreciation and inflation. Meanwhile, Japan's equity market benefits from cyclical exporters, though risks loom from domestic challenges and political uncertainty.

Junya Tanase, a Senior FX strategist at J.P. Morgan, provides insights on Japan's political landscape and its implications for the yen. He discusses the recent LDP leadership change and potential market impacts, including risks of currency intervention. The conversation also covers gold's rapid rally, driven by central bank strategies and supply issues. Additionally, the team analyzes the current U.S. government shutdown and its looming economic repercussions, possibly affecting market stability and data visibility.

In this discussion, Ben Ramsey, Head of EM Sovereign Credit Strategy at J.P. Morgan, joins fellow experts to dissect emerging market repayment risks. They highlight 18 sovereigns at risk, examining familiar trouble spots like Argentina, with its election-related uncertainties and Bolivia facing liquidity issues. The conversation shifts to Asian and African nations, including Sri Lanka's recovery post-restructuring and the repayment concerns in the Maldives. While many countries show resilience, the team emphasizes the need for caution and vigilance among investors.

The hosts delve into how the U.S. government shutdown could influence the dollar's value. They discuss the impending Japan LDP election and its potential market impact, especially on the yen. Historical ties between U.S. political strife and alternative reserve assets like gold and bitcoin are explored. Insights into CAD as a strategic dollar proxy highlight Canadian economic challenges. Finally, the latest FX reserve manager flows reveal shifting trends in currency allocations, with minimal de-risking from dollars.

Join Khagendra and Ipek as they delve into the intriguing world of cross-currency bases. They discuss how DM bases are interconnected and the current expectations for Fed cuts this year. The conversation reveals Ipek's cautious outlook, predicting fewer cuts due to inflation concerns. They also touch on the Fed's balance sheet dynamics, seasonal issuance trends, and year-end funding risks. Plus, learn about the potential impact of short USD positions on the basis. It's a lively discussion packed with insights for market enthusiasts!

Agri trade is back on the U.S. agenda as President Trump plans to address China's soybean purchases. However, time may not be on the side of U.S. farmers, with potential market recovery unlikely until later. Current strong exports of corn and wheat highlight competitive pricing, while risks loom with a potential government shutdown affecting USDA data. The assessment shows global agricultural stocks at multi-year lows, with notable upside price risks. Plus, the ENSO transition to La Nina could impact crop yields in key regions, raising further concerns.