Friday Chart Book
March 15, 2024
The Ides of March have entered the room. This specific time today is most famously associated with the assassination of Julius Caesar in 44 B.C. In Roman times, the Ides marked the middle of the month, a day filled with religious observances. However, the murder of Caesar turned it into a turning point in Roman history, symbolizing the end of the Roman Republic and the beginning of the Empire under his adopted heir, Augustus. This historical significance has endowed the Ides of March with a sense of foreboding, often interpreted as a warning to beware of betrayal or misfortune.
In markets, the Ides of March has no obvious direct impact. However, it is merely a way for journalists and bored doomsayers to transcend metaphorical references into colourful market commentary. As we are moving into next week’s FOMC meeting, some are getting nervous as to how they will frame the current inflationary impulse, which isn’t abating as expected. Only 2 months ago the market had this upcoming meeting priced with a nearly 50 bps cut. Times change, they always do.
There is still time to read my thought piece below about a likely inflation redux and what the implications are.
Inflation Redux?
Last week’s US inflation readings did not allow for further disinflationary euphoria. While one data point doesn’t change the overall market narrative, some pressing questions must be answered. The fear of a second inflation round would indeed set shockwaves across all financial markets were it to materialise. For now, however, markets are shrugging it off and pushing out rate hikes, as the below chart for the US highlights.
In Monday’s ATW, I highlighted the reversal potential of bonds, which has materialised despite relatively strong demand in this week’s auctions. We also had a few reversal signals pointing at the USD crosses, which have also come through in correspondence to the march higher in yields.
“Experience has taught me that the best buying opportunities in long-term bonds present themselves when the yield curve is inverted.” - George Soros, The Alchemy of Finance.
Bond bulls need to hope that Soros is right.
Let’s now review the full set of 254 charts. As mentioned a few weeks ago, I am altering the way I present the book of charts by commenting only on a selection that I find relevant. Thank you for the positive feedback received so far.
You can now also use my models in TradingView scripts, which I made available for subscribers to use on their charts for a fee. If you are interested, ping me an email with your TV username.
By now, most of you will be very familiar with the models and their signals. If not, please study the guide I have published. I have now also recorded a brief video tutorial, which you will find further below.
Let’s go!