Dear Friends and Colleagues,
On Thursday Sep. 21 we are hosting our annual gathering in mid-town New York City. We are looking forward to meeting with clients, partners, and other key contacts. After three years of a bit too much Zoom, it is so nice to meet in person. And the weather is always nice when we gather annually on a Mid-town rooftop. Get in touch with kaye.gentle@exantedata.com if you have not seen the details!
As usual, we have been focused on using proprietary data analysis in combination with independent, conceptual thinking to pinpoint market opportunities. Here are three examples in Q3:
1/ The break higher in US bond yields (well through 4%) during August surprised many, as it happened at a time when US inflation signals turned lower. But the break was consistent with our flow analysis, which pointed to soft demand from Japanese investors, CTA players, and global central banks, while our tracking of US bond funds pointed to limited capacity to absorb additional duration supply. The signal from the BoJ (essentially a de facto abandonment of YCC) and positive US growth surprises played their roles, but the flow dimension was key to the timing (while the credit rating downgrade was only a very temporary force).
2/ With regard to calling ECB and BoE dynamics, data tracking has not been sufficient, at this more controversial (late-stage) part of the cycle. The internal politics within both institutions have been key to understanding the evolution of policy. Congrats to Chris Marsh for successfully adding that dimension to our analysis.
3/ Finally, our global credit analysis proved very helpful in detecting early signals of Eurozone divergence (in bearish direction) and in terms of getting confidence in economic weakness in China. We continue to think that credit analysis is key to understanding the precise evolution of this cycle as we head into 2024.
What about big surprises?
Well, Poland cut rates by 75bp, even if core inflation is running around 10% yoy. It shows, once again, that rule-based policy analysis is not sufficient for central bank analysis. A key dimension here, which may become more and more relevant for EM central banks, is central bank independence. And we will put more weight on that dimension in our analysis in Q4 and beyond.
We are happy to announce that Michael Trounce will be joining Exante Data as a Global Client Advisor!
Mike has an impressive resume, including a Founder role at Trounceflow and research leadership at JP Morgan and Standard & Chartered.
Michael has a unique expert skill set, spanning capital flows, emerging markets, and data science. We are excited to have Mike help engage with a global audience, as we expand our client footprint further (see the press release for details and connect directly on michael.trounce@exantedata.com).
Jean-Laurent Cadorel recently joined Exante Data as an economic analyst. Jean-Laurent is a final-year PhD candidate in economics at the Paris School of Economics. He specializes in financial economics and economic history, precisely looking at financial crises and their effects on the real economy. After working for a year at a multi-family office buy-side fund, Optélios Capital, Jean-Laurent joined Exante Data where he manages the team’s corporate social media. He is also an author on our “Money: Inside and Out” substack.
Finally, we have rewamped our public facing web-site, to better convey what our Institutional Access service (see exantedata.com) includes. But do not hesitate to reach out with questions. We are proud to serve the world’s most sophisticated investors. We will continue to push ahead with a combination of proprietary data and human conceptual thinking, which we believe is the superior formula for alpha generation and risk management. Thanks for the continued support. All the best, Jens Nordvig Founder and CEO Exante Data Inc. This communication is public and you may forward it to your contacts and quote from it, as long as the content is appropriately sourced. To unsubscribe please email kaye.gentle@exantedata.