Friday Thoughts
Macro Tremors / Macro FX Trade Corner
I will keep it short and sweet today, given that it’s a US holiday and markets are largely closed. The second half of the year has started violently, with some tremors across global equity markets, most notably the KOSPI. I noted last week that some of the intra-day volatility and rotation appear quite violent, which is undetected if you just look at VIX futures. In short, I believe a bigger trend move is coming, and I am preparing for some fireworks.
Tremors never happen in isolation. JGB’s have seen another leg higher now breaking out from their May highs with new steepening pressure infecting pretty much all global markets with it. Gold and commodities (excluding Oil) seem to have been forming a base, while the Dollar has retraced following the somewhat weaker jobs numbers yesterday. USDJPY has seen a washout, with some banks suggesting that an intervention might be on the cards soon. I will only believe it when I see it. The BoJ has an almighty task: convincing both bond and currency holders. Good luck.
For a detailed view of all things related, from technicals to sector rotation, please visit our dedicated site at pa-globalmacro.com, where I have made my models and strategies available to subscribers. There is more coming.
The dashboard, for example, includes 200 securities with indications ranging from momentum strength to reversal probabilities, as well as a performance tracker showing the P&L since the signal was initiated.
The sector rotation map shows the relative performance and glide paths of US sectors, helping us track potential rotations. Currently, as you see, technology is losing momentum while quite a selection of other sectors are taking over
During the week, we published two important pieces. The first is the comparison of Greenspan’s era to what we likely can expect from Warsh.
From Alan Greenspan to Kevin Warsh
Alan Greenspan’s passing marks the end of one of the most influential chapters in modern monetary history. Whether you admired him or blamed him for the excesses that followed, there is no denying that he fundamentally changed the relationship between central banks and financial markets.
The second one is the monthly Macro FX Trade Corner piece written by my loyal friend and macro brain, Macro D, who has kindly updated us on his latest thinking and includes 5 new trades from his book, which has had a tremendously successful first half, printing around 37% YTD.
Macro FX Trade Corner
The first half of the year is now behind us, and Macro D’s Trade Corner has continued to deliver exactly what it was designed for: high-conviction macro FX ideas driven by central bank divergence, relative value and evolving macro themes rather than short-term market noise.
Below the paywall, you will find his latest thoughts on markets and the week just gone by.
Have a wonderful weekend, and to all my American friends, have a great July 4th celebration. Party hard and enjoy.
