In this edition of "The Long & Short", Neil Staines explores Central Bank actions, labour market shifts, and rising geopolitical risks: ◻️ Despite current market pessimism, European #growth may rebound due to factors like China's stimulus and NGEU funds, with the #eurozone potentially outperforming the U.S. ◻️ The Fed is increasingly confident that #inflation risks have diminished, and the labour market cooling supports a dovish stance, potentially leading to further rate cuts. ◻️ The Fed acknowledges challenges in interpreting labour market data and stresses that recent rate cuts are not indicative of a worsening economic outlook, though #risks of over-slowing the #economy remain. ◻️ #Geopolitical risks, particularly in the Middle East, add to market volatility, increasing the probability of extreme outcomes (kurtosis) in financial markets. However, the core #macro #outlook for risk assets remains positive. #macroeconomics #investing #bonds #equities #China #growth #wealthmanagement #podcast
Eurizon SLJ Capital
Investment Management
London, England 1,689 followers
Research led, outcome focused investing
About us
Eurizon SLJ Capital (ESLJ) is a global macro and emerging market focused investment manager incorporated in London and regulated by the Financial Conduct Authority. ESLJ is the UK subsidiary of Eurizon Capital, which is the asset management arm of Intesa Sanpaolo, whose total AUM was EUR 378 billion as at December 31st 2018 (including Penghua Fund Management). The company was established in 2016 when Eurizon Capital acquired a 65% stake in SLJ Macro Partners LLP, founded by Stephen Li Jen and Fatih Yilmaz. Both Stephen Jen and Fatih Yilmaz remain as integral leaders and investment managers in the business, serving as Chief Executive Officer & Co-Chief Investment Officer and Co-Chief Investment Officer respectively. Together, they lead a well-established team whose expertise has been sourced from academia, global policy institutions and the private industry. Our differentiated approach to investment management is based on our in-house, independent, and rigorous macroeconomic analysis & quantitative modelling. Our well-established and recognized expertise in fund management, active FX overlay strategies, macro research and advisory services are highly regarded and subscribed to by some of the largest Central Banks, Sovereign Wealth Funds, Hedge Funds and Asset Managers in the world.
- Website
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http://www.eurizonsljcapital.com
External link for Eurizon SLJ Capital
- Industry
- Investment Management
- Company size
- 11-50 employees
- Headquarters
- London, England
- Type
- Privately Held
- Founded
- 2016
- Specialties
- Macroeconomic Research, Emerging Markets, FX Overlay, Fund Management, Global Macro Strategies, Renminbi Bonds, ESG Investment, Enhanced Cash Strategies, China Equities, China Mixed Asset, Active ETF, and Emerging Market Equities
Locations
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Primary
90 Queen Street
London, England EC4N 1SA, GB
Employees at Eurizon SLJ Capital
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Yasmine Ravaï
Global/Emerging Markets Fixed Income & FX Senior Portfolio Manager
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Monica Y W.
Asian multi assets Strategies /Chinese fixed Income/Asian equity/Global Macro/Currency Overlay
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Gerald Hagen Saam
Country Head Germany & Austria at Eurizon Capital
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Sandrine Dubois
Independent Non Executive Director - Sustainable investments is no longer a niche
Updates
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In this edition of "The Long & Short", Neil Staines explores developed market Central Bank action and the growth implications of China's recent policy shifts: ◻️ Chinese policy pivot has sparked a notable equity rally, but global attention is shifting back to developed markets during China’s Golden Week. ◻️ Central bank rhetoric in #Europe, #UK, and the #US highlights a shift towards bearish rate curve developments, with China’s policy activism providing a supportive backdrop for #global #growth. ◻️ The Fed's recent actions, including the 50bp rate cut, reinforce confidence in a soft landing and diminishing #inflation risks, while risk assets benefit from this dovish stance. ◻️ Weak CPI and PMI data in Europe led to rate repricing, but potential Chinese growth could significantly boost German and European economic prospects. ◻️ The UK's fiscal trajectory, influenced by an upcoming budget, is expected to lead to more dovish actions from the BoE, potentially bringing aggressive rate cuts. ◻️ Combined dovishness from DM central banks and positive developments in #China contribute to a "Goldilocks" environment for global equities, characterized by disinflation and moderate growth. #macroeconomics #investing #bonds #equities
Goldilocks and the Three Bears
Eurizon SLJ Capital on LinkedIn
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In this edition of "The Long & Short", Neil Staines explores China's stimulus, the Fed, Europe and the Bank of England. It's quite a Journey: ◻️ The surprise 50bp cut by the Fed signals a dovish pivot, increasing the likelihood of further rate cuts from the ECB and BoE in the coming months. ◻️ The Fed's actions reinforce the narrative of continued disinflation and growth moderation, increasing the probability of a soft landing and supporting risk assets. ◻️ China's recent dual policy pivots, including liquidity and fiscal expansion measures, mark a significant effort to boost domestic demand, with global economic implications. ◻️ The combination of Fed rate cuts and China's stimulus enhances the positive outlook for risk assets and global growth, particularly benefiting markets like Germany and emerging economies. #macroeconomics #investing #bonds #equities #wealthmanagement
Fed + China = A Positive Global 'Journey'
Eurizon SLJ Capital on LinkedIn
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In this edition of "The Long & Short", Neil Staines explores the Fed's rate cut, their narrative and implications for markets. ◻ Surprise 50bps Rate Cut: The Federal Reserve delivered an unexpected 50bps rate cut, setting the target range at 4.75% – 5.00%, marking a dovish shift in monetary policy. ◻ Inflation Confidence: The Fed expressed greater confidence in moving inflation toward the 2% target, with balanced risks to both its employment and inflation mandates. ◻ Front-Loaded Rate Cuts: The updated Fed "dots" revealed that rate cuts would be front-loaded, with 100bps projected cuts in 2024, followed by additional cuts in 2025 and 2026, bringing the rate down to the long-term equilibrium rate of 2.75%. ◻ Data-Driven Decisions: Fed Chair Powell emphasised that future rate decisions will be made on a meeting-by-meeting basis, dependent on employment and inflation data, signaling no rush to ease monetary policy aggressively. ◻ Global Impact on Other Central Banks: The Fed’s actions increase the likelihood of rate cuts from the ECB and Bank of England, with growing expectations for a 50bps cut from the BoE in November and potential moves from the ECB. #macroeconomics #investing #bonds #equities #dollar #federalreserve #wealthmanagement
Federal Reserve: Just Getting Started
Eurizon SLJ Capital on LinkedIn
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As global economic conditions shift, Neil Staines explores the key trends shaping markets, from central bank decisions to the outlook for the US dollar. ◻ The USD is vulnerable to a deeper correction, with disinflation and growth moderation driving macro conditions. ◻ The ECB's 25 bps rate cut brought no new guidance, maintaining a cautious, data-dependent approach. ◻ ECB President Lagarde reiterated the importance of data, keeping October rate cut prospects on the table. ◻ The Draghi report pushes for structural investment in the eurozone via joint liability debt issuance, seeking a long-term strategy for competitiveness. ◻ USD weakness could accelerate due to hedge ratio adjustments, while macro settings support elevated volatility and a soft landing for the US. #macroeconomics #investing #dollar #inflation #growth #disinflation #wealthmanagement #oasis
Developed Market Policy Restriction Sliding Away?
Eurizon SLJ Capital on LinkedIn
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Neil Staines is back with thoughts on the Fed's shifting priorities, potential dollar depreciation, and the economic outlook following the Jackson Hole Symposium. ◻ July Policy Meeting Summary: Fed shifted focus, emphasizing reduced inflation risks and increased employment risks. ◻ Powell’s Inflation Stance: The Fed plans to cut rates before reaching the 2% inflation target, with unemployment already above their forecast. ◻ Dollar Outlook: Twin deficits, USD overvaluation, and growth moderation point to a potential significant USD depreciation. ◻ Jackson Hole Highlights: Powell's dovish tone highlighted inflation under control and focus on employment. ◻ Data Dependence: Recent data shows modest labour market loosening, reduced inflation risks, and no immediate recession signs. ◻ Forward Guidance: Analysts revise dollar forecasts downward, with increased attention on the August employment report. ◻ Macro View: Expecting disinflation, no near-term recession, and higher market volatility, but anticipate a soft US landing. #macroeconomics #investing #dollar #dollarsmile #bonds #equities #commodities #wealthmanagement
September to Bring a Higher Baseline Volatility?
Eurizon SLJ Capital on LinkedIn
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In a change to our regular line-up, Alan Wilson stands in for Neil Staines with a focus shift to the 'Long & Short' of Emerging Markets. Key points: ◻ Fed Shift: Chair Powell signalled a shift in Fed priorities from inflation control to labour market support, with potential rate cuts starting as early as September. ◻ Emerging Market Impact: Could the Fed's dovish stance benefit Emerging Market assets? ◻ Regional Focus: The National Bank of Hungary paused rate cuts due to inflation concerns, while Brazil saw a slight slowdown in inflation. ◻ Resilient EM Assets: Despite global market volatility, Emerging Market assets have shown resilience, driven by credible central bank actions and reduced exposure to foreign currency debt. ◻ Outlook: Where next for emerging market capital flows? #emergingmarkets #macroeconomics #investing #wealthmanagement #bonds
The Federal Reserve & Emerging Markets: Labour of Love
Eurizon SLJ Capital on LinkedIn
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Ruth Carson and Anchalee Worrachate at Bloomberg highlight Stephen Jen's insights on the US Dollar..."Think an avalanche." https://lnkd.in/ezEpQENb In the article, Stephen Jen, CEO of Eurizon SLJ Capital, who has been bearish on the US Dollar for the last 15 months, shared that Chinese companies could shift $1 trillion from dollar assets to Yuan as the Fed cuts rates. This move could strengthen the Yuan by up to 10% in a US soft landing scenario as the Dollar's decline accelerates. His analysis, first highlighted in "A Dollar Avalanche Building in China," a research note authored by Jen on June 27, 2023, and supported by the "Dollar Smile" theory, suggests the US dollar might face downward pressure if the Fed reduces rates more aggressively than expected. Curious to learn more? Explore the Dollar Smile theory, or request a Free Research Trial here: https://lnkd.in/ef4wm2SZ #macroeconomics #dollarsmile #wealthmanagement #investing
Fed Cuts May Send $1 Trillion FX ‘Avalanche’ to China, Jen Says
bloomberg.com
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In this edition of "The Long & Short", Neil Staines delves into the evolving economic landscape as markets shift from fearing a recession to pricing in a potential soft landing. The narrative has shifted dramatically, reflecting changes in market sentiment and central bank guidance, particularly from the Federal Reserve. ◻ Markets are increasingly optimistic about a soft landing, with recent data showing disinflation and moderated growth. ◻ The Fed's recent dovish signals, balancing inflation and employment risks, suggest potential rate cuts ahead. ◻ The US Dollar is facing headwinds due to overvaluation, fiscal concerns, and the possibility of significant depreciation, especially if Jackson Hole provides a trigger. #macroeconomics #growth #inflation #investing #bonds #jacksonhole
Will Jackson Hole be the Trigger For US Dollar Weakness?
Eurizon SLJ Capital on LinkedIn
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What is in store for Emerging Markets next week? In a change to our usual #podcast https://lnkd.in/eJsPDYw4 line-up, Alan Wilson takes over for Neil Staines and explores the factors and events impacting #emergingmarkets now and in the week ahead. #jacksonhole #growth #inflation #macroeconomics #investing #bonds #wealthmanagement