If electricity becomes a scarce commodity, it is important to note who’s on top of the situation and who’s not. Here is the answer and how it plays into my portfolio thoughts.
Andreas, Since you've been in Italy for your honeymoon, have you noticed any energy concerns from the citizens you've encountered? Just wondering what the sentiment is on the street over there right now. Thanks!
Small comment on the first chart. Slovenia and Croatia have split ownership of the Krško nuclear power plant in Slovenia, which accounts for 15% of Croatia's electricity needs. If you adjust the data for this fact, both countries fall a lot closer to the mean. Only pointing it out since you mentioned the two countries as opposing examples.
Did you take for account gas to oil switching? There is a lot of conflicting information about to what extend this can be implemented in Europe, but it may play w major role in solving the problem, at least for some time.
You are IMO overlooking the impact of trillions in QE repatriation to the EZ and UK as local rates rise vs asset swapped yields from the US. What do you think propped the USD up all these years?
look up the net xccy yields and given 85% or so of the bank flows are sub-2yr and asset swapped, think about how much rolls off per qtr. Its too sublte to matter on any single day like today but over 3-6 months can be a driving force I think. Asian flows are a bit more linked to long durationa nd life insurer driven. Brad Setser wrote a few articles on Asian flows for CFR in the past.
Steno any comments on the European stock exchanges...European equity markets will suffer from these external supply shocks , higher risk premiums,worsening fundamentals and higher capital costs..why not short,with ETFs Tec Dax et al such as VW..for months..?
Andreas, Since you've been in Italy for your honeymoon, have you noticed any energy concerns from the citizens you've encountered? Just wondering what the sentiment is on the street over there right now. Thanks!
Small comment on the first chart. Slovenia and Croatia have split ownership of the Krško nuclear power plant in Slovenia, which accounts for 15% of Croatia's electricity needs. If you adjust the data for this fact, both countries fall a lot closer to the mean. Only pointing it out since you mentioned the two countries as opposing examples.
Fair point
Did you take for account gas to oil switching? There is a lot of conflicting information about to what extend this can be implemented in Europe, but it may play w major role in solving the problem, at least for some time.
You are IMO overlooking the impact of trillions in QE repatriation to the EZ and UK as local rates rise vs asset swapped yields from the US. What do you think propped the USD up all these years?
That is an important structural story, but I am not buying it yet.. BoE just restarted QE, not a lot of repatriation in that trend :)
look up the net xccy yields and given 85% or so of the bank flows are sub-2yr and asset swapped, think about how much rolls off per qtr. Its too sublte to matter on any single day like today but over 3-6 months can be a driving force I think. Asian flows are a bit more linked to long durationa nd life insurer driven. Brad Setser wrote a few articles on Asian flows for CFR in the past.
https://www.strategicmacro.com/2022/09/foreign-treasury-holdings-qt-and-euro.html
Thank you for the update. Solid Research as always!
What's your stop loss on the new positions...UUP & CZK/HUF?
Appreciate it and your signal reports are very impressive!
I think he indicated his stop on UUP was 29.09, not sure about the others.
Steno any comments on the European stock exchanges...European equity markets will suffer from these external supply shocks , higher risk premiums,worsening fundamentals and higher capital costs..why not short,with ETFs Tec Dax et al such as VW..for months..?