Dear all,

It has been a couple of incredibly challenging weeks for US assets, but our nowcasting techniques have thankfully kept us on the right side of developments. We have been short USD and positioned for lower USD bond yields, while our equity exposure has been limited to a few European bets. As a result, we have made steady returns while equity markets have struggled.

This is precisely the purpose of our nowcasting techniques: to guide us in real-time on developments in the main macro economies and to avoid the pitfalls of drawdowns when, for example, the US (or other economies) experiences a sudden and yet unreported setback in economic growth momentum. The tariffs vacuum has led to a standstill in US corporate decision-making, which will negatively impact key US economic figures. We are now monitoring whether our models will indicate a slowdown in Europe, China, Japan, and elsewhere as a consequence.

The next big battleground will be inflation. While the straightforward logical conclusion is a spike in US prices due to import tariffs, our nowcasting currently signals the opposite—likely due to inventories being filled ahead of the tariff implementation.

If this proves true, it could wrongfoot many market participants once again and potentially present a buying opportunity in US equity markets. We will, of course, continue to monitor these developments in real time and adjust our portfolio allocation accordingly with vigilance.

We have returned approximately 1.50% through March so far and are now up 3.14% year to date.

If you would like an update on the strategy, please book a meeting with us here: https://calendar.app.google/gtYtbBp6vyWfthJf8

Best regards,
Andreas Steno
Chief Investment Officer,
Asgard-Steno Global Macro Fund

Performance chart of the week:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Macro chart of the week #1: What if inflation comes lower despite tariffs?