Friday Thoughts
Taco Fatigue? How should Central Banks react? Chart Thoughts
Ellegedly, morale only improves while the battering continues. This week has seen no relief other than Monday’s Taco rally and Wednesday’s renewed optimism. Thursday almost traditionally sees de-risking, with both equities and bonds getting hammered.
While I’m typing this, Trump has released a statement, nicely, a few minutes after market close, declaring a further extension of his self-imposed deadline, initially set at 48 hours, to Easter Monday, 6th of April. Talks are ongoing, and obviously, things are going really well.
ES futures initially jumped, then retraced more than half of that gain. Welcome to Trump’s world. Bonds, which have sold off all day, hardly flinched. Is he losing his Taco spice? He needs to find another magical way to calm markets. The market is also slowly coming to the realisation that a further delay will harm global markets even more, as supply disruptions in Asia are already underway. Things have to end soon.
It’s been a steady week for our 2026 buy-and-hold portfolio. The hedges are working, and we are participating in upside when it materialises. Would I lift the hedges if I could? Absolutely not. They are the proverbial brakes we have in place to keep pushing the pedal. We’re up 9% YTD and only around 1% below our high-water mark from February.
The models have again helped us navigate these treacherous waters, warning us about a reversal in US rates and gold/silver earlier this week. Reversals, however, are mini-cycles within a broader trend. Those trends are being monitored through my momentum model. All signals from both models are now part of the dashboard (see below), which I am working to automate. There is much more in the pipeline, but it takes time to build. Rest assured, all current subscribers will have access to it at no additional cost. And yes, it’s a good time to join now.
Let’s now circle back to a few charts, as well as my current thinking on how central banks should react to the oil supply shock. Front-ends have reacted viciously. Is it a regime change or a massive opportunity?
Macro D is also giving us his latest thoughts on the current situation and what it implies for his running book of Macro FX trades.
The charts and dashboard will follow over the weekend with Friday’s closing prices.
Let’s explore.
