After another solid week for our strategy, we are looking ahead to a range of key U.S. data releases that will showcase how the current supply shock shares similarities with the early stages of the pandemic.

The U.S. goods balance reached new all-time lows in March due to tariff frontrunning, and inventories of finished goods are now very elevated. This creates an interesting backdrop, as it likely implies that measured inflation will come in much lower than anticipated over the coming month(s), before we can fully assess the effects of tariffs.

Meanwhile, we are seeing early signs of a resumption in shipping activity from China, potentially in anticipation of the U.S. administration dialing back tariffs over the next 30–45 days. Our models have accordingly (and timely) turned less downbeat on risk assets, while still remaining in the camp of lower bond yields.

At the same time, European growth momentum is starting to weaken in our nowcasting models, while inflation pressures remain absent. Combined with a strong EUR, this dynamic supports the case for the ECB to cut rates relatively quickly.

We remain vigilant and maintain a high conviction in a strong return profile over the next 5–6 weeks given our current positioning.

We are up approximately 3.4% year-to-date.

If you’d like an update on the strategy, feel free to book a meeting with us here!

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

Performance chart of the week: