Macro Regime Update: Will the QE-like environment continue?
Will the QE like market environment continue? We have updated our quant-based allocation regime model. Find it here.
We update our Macro Regime Model every month to address the overall tactical aspects of asset allocation in a structured way. Last month we predicted a QE-like March with increasing liquidity but decreasing growth and inflation momentum.
Liquidity indeed increased through March, which was accelerated by bank failures leading to liquidity injections via lending programs. Growth declined marginally, while inflation decreased in year-on-year terms across the West through March.
Our projection is more of the same in April. Continued weakness in inflation and growth numbers paired with added liquidity.
This is typically 1) positive for duration-intensive risk assets, 2) slightly positive for US Treasuries, 3) USD positive and 4) negative for commodities. Find the entire back-tester of Macro Regimes in our Dashboard for oyr premium clients only here.
Want to know how and why the model allocates as it does? Find the entire piece here → https://stenoresearch.com/watch-series/macro-regime-model-update-qe-like-environment-continues/ … Remember to catch 20% off with the code “crisis20” - the first 14 days are FREE for everyone.
Chart 1: Steno Signals Macro Regime Indicator