12 Years of VP vs Noise

Sharing the ideas and experiences that have influenced our work

A perfect storm for food prices

Brazil is suffering the worst drought in a century, after its crops were scorched and frozen earlier in the year.  Agricultural commodities prices are spiking, forcing the UN world price index 33% higher vs 12 months ago.  EM inflation baskets generally have a much...

read more

US economic outperformance supports USD rally

We continue to expect US economic outperformance in the coming months, which should attract capital towards the US, boosting the USD.  Although US PMIs are no longer elevated vs the rest of DM, the previous surge has yet to play out, and offers a long 12 month lead on...

read more

When to buy EM debt

Real yields are much higher in EM vs DM, and the spread is the widest in 20 years. Source: Bloomberg, Macrobond, Variant Perception With many EM central banks committing to hiking cycles and front-loading rate hikes to combat surging inflationary pressures, nominal...

read more

A garden is never finished

When I think about creating a great service, a quote by Czech writer Karel Capek comes to mind: "A garden is never finished. In that sense it is like the human world and all human undertakings". At Variant Perception we strive to improve upon yesterday, from the...

read more

Back to the Seventies?

Inflation tends to operate in regimes: unanchored vs anchored, and this often coincides with political regimes.  Activist governments and policy coordination with central banks often feature in, and contribute to, high inflation.  And we tend to see wealth...

read more

The crude oil recovery

US petroleum product data shows that diesel and gasoline consumption is recovering strongly. Back in May, we had flagged the potential for a bonanza summer travel season that could boost oil demand.  This is kicking in. Source: Bloomberg, Macrobond, Variant Perception...

read more

US labor market: issues under the surface

The US labor market has structural problems that are more significant than a headline unemployment rate nearing 5% would suggest.  The skill mis-match narrative is visible in the data. The ratio of hires to job openings has collapsed. Source: Bloomberg, Macrobond,...

read more

Making VP work for me

3 years after graduating I was on a very comfortable path at a big investment management company where I could steadily progress up the ranks and make a good living. Instead I decided to join Variant Perception. I wanted to learn more, grow more and risk more....

read more

Subscribe to VP vs Noise for thoughts on markets and business from the team (and friends) at VP