Hope for the Best, Prepare for the Worst – Live with Andreas Steno Larsen

Published on
February 28th, 2020
Duration
41 minutes

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Hope for the Best, Prepare for the Worst – Live with Andreas Steno Larsen

Live ·
Featuring Andreas Steno Larsen

Published on: February 28th, 2020 • Duration: 41 minutes

Equities are falling, bonds yields are collapsing, FX volatility is ramping up, central banks are re-initiating QE processes and a flight to safety is in full effect. The real question is… how bad is all of this in the grand scheme of things? Is this just a blip or something much more sinister? To this end, we have invited Global FX and Fixed Income Strategist at Nordea Markets, Andreas Steno Larsen, to discuss everything from the latest round of terror in equity markets to G10 currencies and what we can expect from safe haven assets if things were to continue to intensify.

Comments

Transcript

  • KG
    Kos G.
    1 March 2020 @ 12:36
    Nevertheless, I find the question about Ukrainian UAH strength unexpectedly intriguing. I remember Ukraine issued UAH denominated bonds this summer and they were sold mostly to foreigners, thus lots of foreign denominated capital strengthened UAH exchange rate. But that still doesn't explain why it held the last week. Ed, maybe you could shed some light? Do you have any ideas?
    • JC
      John C.
      4 March 2020 @ 08:30
      you got it plus it's a managed currency with capital controls. UAH didn't move much right after Brexit!
  • JC
    John C.
    4 March 2020 @ 07:36
    Re Ukraine, lived in Kiev for awhile now, basically the recent strength (which has tailed off, was in high 23s few weeks back versus the USD, now above 24 (versus 27 last year)) is due to several factors including, importantly, the continued issuance of Hryvnia-denominated by the country to foreign buyers (due to the high interest rates, bond buyers chasing yield, sound familiar?). As a result the CB has been buying hard currency to prop up their reserves and we've seen a strengthening the currency. Don't forget it's a managed currency and the Hryvnia didn't move much at all right after Brexit (!) Great video completely agree with Mr. Larsen. Financial conditions will continue to get worse. Even with yesterdays's 50 bps cut the US still has 100 bps to get to zero eventually and the Eurodollar trade is still viable.
  • JC
    John C.
    4 March 2020 @ 07:36
    Re Ukraine, lived in Kiev for awhile now, basically the recent strength (which has tailed off, was in high 23s few weeks back versus the USD, now above 24 (versus 27 last year)) is due to several factors including, importantly, the continued issuance of Hryvnia-denominated by the country to foreign buyers (due to the high interest rates, bond buyers chasing yield, sound familiar?). As a result the CB has been buying hard currency to prop up their reserves and we've seen a strengthening the currency. Don't forget it's a managed currency and the Hryvnia didn't move much at all right after Brexit (!) Great video completely agree with Mr. Larsen. Financial conditions will continue to get worse. Even with yesterdays's 50 bps cut the US still has 100 bps to get to zero eventually and the Eurodollar trade is still viable.
  • DL
    Dominic L.
    3 March 2020 @ 03:23
    Is there any way to improve the audio quality? I actually wasn't able to make it through the last video because of the bursts of high pitch from the poor mic quality (I have sensitive hearing ...). Which is a shame because I'd prefer to listen/watch these as opposed to have to read the transcripts. Please consider investments in mics for guests. Thanks
    • DL
      Dominic L.
      3 March 2020 @ 03:26
      Actually I think it may be the bit rate (? ... not a tech guy). Something about the upload/download quality is very poor for some reason.
  • GG
    Gary G.
    1 March 2020 @ 03:58
    This cutting of interest rates is absolute non-sense. This isn't even a liquidity-driven event. But cuts are the CoV vaccine right. Absolute Stupid! But let's just take fed funds to zero fast and then we are back to square one.
    • GG
      Gary G.
      1 March 2020 @ 20:22
      If the rates are in 7-10 % range, sure the cuts will help stimulate the economy. With rates in 1-2% range, how does it help the economy? How big of a difference am I talking with the discount rate changing from 100 bps to zero? I'll be selling all the rips!!
  • DR
    David R.
    29 February 2020 @ 19:43
    A number of other central banks of countries on the US Treasury Currency manipulation watch list (in which US should rank #1 as the world's worst currency manipulator, hypocrites!), have cut interest rates already in 2020. Even those with stronger growth rates than US like some in southeast Asia. So, I'm not sure the SNB will be dissuaded now to not weaken the CHF, but I don't know at all. It seems unpredictable, but with the Fed already cutting more than everywhere in the world and poised to continue cutting more than everyone, I can't imagine any other CB be concerned about cutting, especially if their currencies are flat or gaining against the weak dollar. So many FX did gain against USD this week again, and USD languishes far below where it was 3+ years ago after Trump was elected.
  • JW
    JW2 W.
    29 February 2020 @ 14:02
    One of the questions we did not get to was what Andreas thinks about the European Banks. Are they in trouble and if this is too generic a statement, perhaps the question is how he sees the Euro banking system repond to the upcoming macro environment he was talking about.
    • DR
      David R.
      29 February 2020 @ 19:32
      Everyone in the banks and financial industry is strictly forbidden from talking down the European banks or financial system. This is well documented and discussed elsewhere. If you do, you're fired and lose all your qualifications. So I'm certain this topic was off-limits here, not answered and if accidentally asked, would have been dodged or answered dishonestly.
  • JW
    JW2 W.
    29 February 2020 @ 10:30
    Very interesting interview and thanks for taking my questions, even the one about the 'villains' :-)
  • RY
    Roy Y.
    28 February 2020 @ 19:22
    VVG ... Thanks Andreas ...