Unappetizing options

Hard as it is to believe, election day in the UK is finally here.  The timing is particularly poignant for Macro Man, as it was on the heels of the last one that he boarded a plane for the USA, bidding a fond adieu to both the UK and financial blogging.  Suffice to say that the past five years haven't gone quite as smoothly as either David Cameron or many macro men would have liked; while naive (or cynical?) buyers of risky assets regardless of price have fared well, one does wonder if they, too, will face their comeuppance one day.

Contrary to Macro Man's expectation of a few weeks ago, the race now looks too close to call.  Small wonder, given the unappetizing fare on offer; given the choice between a turd sandwich, ceviche of industrial waste, or plutonium sushi, what would YOU order off the menu?  It seems fair to assume, however, that between a choice of the status quo and "Red Ed" Millbean, sterling markets would plump for the former every time.

An equally unpalatable choice can be found in which formerly profitable position you'd like to be holding.  The clear winner of the current market election is the pink flamingo, which has sent a cascade of red ink across holders of bonds, European equities, euro and oil shorts, etc.  Although Yellen's equity comments yesterday could have had a bigger impact, it's also probably worth noting that Spooz have legged other indices this year, reflecting to some degree at least relative positioning.

Macro Man has been intrigued to observe, however, that despite all of this kerfuffle the front end of the curve has been relatively well behaved.   Although one might expect the whites in particular to drill down to the data and be relatively immune to the slings and arrows of outrageous fortune, ongoing data disappointments from the US have been unable to propel EDZ5 beyond where it was at half a second past 8.30 am on the last payroll day.   Further out, things are rolling over just a bit...Macro Man's EDZ5/M6 steepener has come back from the dead:

Of course, all of this could simply be a "sell in May"/pre payroll adjustment/CTA beatdown that will be swiftly forgotten come payrolls or the next dodgy Greek development or some other shiny headline to distract the market magpies.   Then again, the punishment of apparently clear themes and back 'n' fill price action has been a regular feature of macro markets for the vast majority of David Cameron's five years in Downing Street.   Macro Man could almost (but not quite) countenance voting Gordon Brown back in if it meant an end to ZIRP world and a return to normal markets!