Morgan Stanley 1/4: With consensus now on board with our V-shape recovery and cyclical bull market in the context of a new economic cycle, investors should be on the lookout for how we could be surprised. First, while we were early with our V-shape recovery narrative,
Morgan Stanley 2/4: we must admit it's been even stronger than we expected 9 months ago. Much of this has to do with the enormous stimulus provided by the Fed and Congress, which has led to a recovery in retail sales and other forms of consumption.
MS 3/4: 2nd, the advent of a new risk seeking retail investor with easier and cheap access to markets has become the marginal buyer of stocks, which has also added to the market volatility. Finally, development of multiple vaccines faster than most expected has increased investor
MS 4/4: confid in both recovery & higher stock prices.
Perhaps most important is the rapid recovery in earnings we are now seeing in the fourth quarter reports. This too is very much in line with our call for greater operating leverage than in a typical recovery from a recession.

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More from @Francesc_Forex

10 Feb
Citibank 1/8: Can US exceptionalism get in the way of the bearish #USD outlook?
US relative growth outperformance versus the rest of the world (US exceptionalism) could see more sustained support for USD. Indeed, Citi analysts find that among their signals,
Citibank 2/8: one of the most reliable indicators to predict USD performance is Citi Data Change Index(DCI) spread between US & weighted average of other #G10 economies that currently favours US economic outperformance. US exceptionalism can get in the way of a dollar sell-off by
Citibank 3/8: (1) weakening the equity side of the argument for a weaker dollar, linked to Value vs Growth outperformance should the global economy stumble to the point where US assets and USD’s role as safe haven kick in again OR (2) from very strong US economic outperformance
Read 8 tweets
10 Feb
ING Bank 1/4: Cautious #Riksbank unlikely to halt krona’s strength in 2021.
Despite a more resilient end to 2020, Sweden's #Riksbank remains cautious about the outlook. A further extension to the quantitative easing programme is possible later in the year,
ING Bank 2/4: particularly if the downside risks surrounding the virus materialise - though a return to negative rates remains unlikely.
While modestly surprising the market, the bias coming from the meeting today is not enough, on its own, to push #EURSEK below the 10.00 level.
ING Bank 3/4: For this to happen, we need to see the 2Q economic recovery in the eurozone and Sweden, which will then benefit cyclical currencies such as SEK. Near-term, we expect #EURSEK to continue hovering around the 10.10 gravity line,
Read 4 tweets
10 Feb
TD Securities 1/4: Details for The Day Ahead:
#USD Oil prices have bounced, and the gasoline component of #CPI likely rose sharply again in January (TD: 0.3% m/m), but we expect another tame reading for the trend-setting core series, even with some tendency for above-trend gains
TD Securities 2/4: in January in recent years. The rise in the core index was probably held down by a fourth consecutive decline in used vehicle prices (after sharp increases) and minimal gains once again in the rental components. Our estimate for the rise in core prices is 0.12%
TD Securities 3/4: before rounding. Our forecast implies 1.4%/1.5% y/y for total/core prices in January, little changed from 1.4%/1.6% y/y in December and down from 2.3%/2.4% y/y in February 2020 (pre-COVID).
Read 4 tweets
10 Feb
KBC Bank 1/4: The economic calendar contains US CPI today. Consensus lies at 1.5% y/y for both headline and core measures. Inflation is gradually becoming a topic in markets thinking with US market-based inflation expectations reaching ever higher levels.
KBC Bank 2/4: For today however, the reading probably won’t have a dramatic impact. We more look forward to US 10-yr bond sale later today. Will the recent rise in long rates suffice to offset the increased inflation (and perhaps sovereign credit) risks markets see to the fiscal
KBC Bank 3/4: and monetary abundancy? A smooth auction would probably ease such fears. This could solidify the 1.2% (10-yr) and 2% (30-yr) technical resistance areas, but only for the short term. It could keep the USD in a less beneficial position as well,
Read 4 tweets
10 Feb
KBC Bank 1/4: The big reflation trade took a moment to catch its breath yesterday. Circumstances were ideal with no important data scheduled to trigger abrupt market moves. Equities finished broadly unchanged after erasing earlier losses, both in the EMU and the US.
KBC Bank 2/4: Core bond yields traded choppy and below recent (recovery) highs. The US kicked off its bond sales with 3yr tenor. The auction went smoothly but didn’t impact markets. US Treasuries edged higher at the long end of the curve, sending rates marginally lower driven by
KBC 3/4: the real yield component. German yields ended a volatile trading day flat. Peripheral yield spreads widened just 1 bps. #USD traded on the back foot even as risk sentiment was fragile. #EURUSD took out intermediate resist around 1.208 to finish session north of 1.21again
Read 4 tweets
9 Feb
Credit Suisse 1/5: Key #StockMarket Themes:
The #SP500 rally has extended to our long-held 3900 “measured triangle objective”. With further layers of resistance seen here and stretching up to 3930 our “ideal” base case remains for a cap in this 3900/3930 zone and
Credit Suisse 2/5: for a consolidation/correction phase to then unfold. Big picture though, even if some consolidation is seen we will continue to view this as a temporary pause ahead of a clear break above 3930 in due course.

#Nasdaq100 stays seen on course for our “measured
CS 3/5: triangle objective” at 14000/10.
#Russell2000 has surged sharply higher again & we stay bullish for 2320/34.
#EuroStoxx50 maintains a bullish continuation pattern and we stay bullish for the “pandemic” price gap from last Feb, seen starting at 3762 & stretching up to 3800
Read 5 tweets

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