tag:blogger.com,1999:blog-34323687.post4794658208723979950..comments2024-03-29T03:19:56.674+00:00Comments on Macro Man: What now?Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-34323687.post-91454614460429483692022-08-25T14:40:20.240+01:002022-08-25T14:40:20.240+01:00Incredible points. Sound arguments. Keep up the gr...Incredible points. Sound arguments. Keep up the great effort.<br /><br /><a href="https://www.betmantoto.pro/" title="토토사이트" rel="nofollow">토토사이트</a> <br /><a href="https://zen.yandex.ru/id/6303ac868220042fde57f585" title="배트맨토토프로" rel="nofollow">배트맨토토프로</a> <br />officialtoto365prohttps://www.blogger.com/profile/05823115273391412934noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-18197444747213517812015-12-18T03:23:08.689+00:002015-12-18T03:23:08.689+00:00Something changed today. S&P and the yen have ...Something changed today. S&P and the yen have been joined at the hip for 2 years. Today they parted company dramatically. More than a coincidence that the fed raised rates for the first time yesterday. I sense a disturbance in the force. Shoelessnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65204546236862317372015-12-18T02:59:59.644+00:002015-12-18T02:59:59.644+00:00'Buy Aussie dollar when Fed hikes': Saxo&#...'Buy Aussie dollar when Fed hikes': Saxo's Steen Jakobsen<br /><br />"I expect an outperformance of the Australian dollar in the first six months of next year."<br /><br />The Australian dollar looks cheap if you believe China is going to do better than expected, which I do," Mr Jakobsen said. "And it looks cheap if you think the Federal Reserve hike cycle at least initially will lead to a weaker [US] dollar – then the Australian dollar becomes extremely attractive at US70¢.<br /><br />http://www.afr.com/markets/currencies/buy-aussie-dollar-when-fed-hikes-saxos-steen-jakobsen-20151120-gl3zjd<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-53752457940677462142015-12-18T01:44:21.617+00:002015-12-18T01:44:21.617+00:00From Anatole Kaletsky:
Looking at the monetary ti...From Anatole Kaletsky:<br /><br />Looking at the monetary tightening that began in February 1994 and June 2004, the dollar strengthened substantially in both cases before the first rate hike, but then weakened by around 8% (as gauged by the Fed’s dollar index) in the subsequent six months. Over the next two-to-three years, the dollar index remained consistently below its level on the day of the first rate hike. For currency traders, therefore, the last two cycles of Fed tightening turned out to be classic examples of “buy on the rumour; sell on the news.”<br /><br />Of course, past performance is no guarantee of future results, and two cases do not constitute a statistically significant sample. Just because the dollar weakened twice during the last two periods of Fed tightening does not prove that the same thing will happen again.<br /><br />But it does mean that a rise in the dollar is not automatic or inevitable if the Fed raises interest rates next month. The globally disruptive effects of US monetary tightening – a rapidly rising dollar, capital outflows from emerging markets, financial distress for international dollar borrowers, and chaotic currency devaluations in Asia and Latin America – may loom less large in next year’s economic outlook than in a rear-view glimpse of 2015.<br /><br />http://www.theguardian.com/business/2015/nov/17/what-a-us-interest-rate-rise-really-means-for-the-dollarAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-82777894414240926552015-12-18T00:07:50.735+00:002015-12-18T00:07:50.735+00:00Making sense or not, it kind of feels the Fed is h...Making sense or not, it kind of feels the Fed is happy now to have restored their "credibility". Yes the guidance seems hawkish despite median plots dropping a notch from the September meeting. Four hikes is the "new normal" with which to start the new year. But at the same time it might be because as such there is more room to maneuver and chip away if need be. Now just easy to pretend everything is developing better, since the first hike is unlikely to have any impact on the real economy anyway, with those mega reserves still slushing around.<br /><br />But look at some preliminary signs - industrial production decreasing, specific citations of <a href="http://www.wsj.com/articles/3m-cuts-2015-forecast-again-1450187573" rel="nofollow">weakening global demand for electronics</a>, DJT down 17% for the year, commodities have finally started to catch up on high yield underlying with potential spillover effects still ahead. And what about those sneaky devaluing Chinese which started the whole wobbling process in the first place?<br /><br />Just saying what seems hawkish now, might not seem so hawkish in two to three months if those symptoms start getting any worse. That's why it seems plausible to expect that slowly those expectations start getting nibbled away thus meaning the wave is rapidly passing beneath long USD, short oil, short EM and other inversely correlated trades. Stagflation indeed seems an interesting possibility to take into account. 2016 finally has a chance to become a decent year for value pickers and dumpster divers.hipperhttps://www.blogger.com/profile/10934536233703452719noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-45227562326695151142015-12-17T22:52:35.337+00:002015-12-17T22:52:35.337+00:00The Santa rally has finished early this yrThe Santa rally has finished early this yrCityhunternoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65984027430819118102015-12-17T22:15:08.486+00:002015-12-17T22:15:08.486+00:00"19 year old coke addict tottering around dru..."19 year old coke addict tottering around drunk on six inch heels"<br /><br />you know my ex?Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37366725749051688582015-12-17T22:05:14.347+00:002015-12-17T22:05:14.347+00:00Option expiry anyone? ;)
This month has actually...Option expiry anyone? ;) <br /><br />This month has actually been absolutely splendid so far for me, which can only mean one thing; defensive value is back in business. At least for a while, which is quite amusing of course, and I have little sympathy with the FANGs out there. <br /><br />The whole "path of the Fed" is obviously not set in stone, and I think "data dependency" is the key. I think that punters with a good eye to the economic data will be able to make a fair buck trading front-end futures in the next six months. Nothing is given! I reiterate my view made a while back that the 2s5s bear flattener is the key for me. It is no way close to inversion, but it could get there quickly if a more aggressive path suddenly became the topic du jour. <br /><br />Not planning to do much, but for the record. I think bunds are a short, and I think equities will probably glacially drift higher in Q1. Especially EM and FTSE. My rationale ... simples. M1 growth in China has surged, and I think the Q1 data will be quite a bit better than the deflation focused consensus thinks. There you have it ... another one for the "reflationists" ... <br /><br />Stay safe, and yes LB ... it has been sobering to watch the implosion of JM this year, sobering indeed! CVhttps://www.blogger.com/profile/16843402165210120665noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-8737171130532572742015-12-17T21:16:47.548+00:002015-12-17T21:16:47.548+00:00A bad day for Funny Money, Jose Mourinho and the J...A bad day for Funny Money, Jose Mourinho and the JBTFDers. A good day for boring old fixed income longs and Hammock investors. It's just possible we are entering a period where real economic data and profits might matter for a month or two.<br /><br />Marshall, nothing is less fun or contributes to a higher Misery Index among punters than a good bout of Staggers. I wasn't there in the early 70s, but I gather it was like Chinese water torture for equity traders and fund managers.<br /><br />Nico, bond/FFR market CLEARLY doesn't believe in 4 hikes next year, as explained above by MM. Stock market is a 19 year old coke addict tottering around drunk on six inch heels. I don't know whether she's going to fall but it seems prudent not to get too close to her at the moment.<br /><br />Sticking with my Monday-Tuesday dumpster diving plans for now. Fascinated by the dynamics of Bucky. Reversal of the crowded trade must surely come soon?Leftbacknoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71227765796960806662015-12-17T21:05:13.970+00:002015-12-17T21:05:13.970+00:00For the anons - sing along to this nice clip.
htt...For the anons - sing along to this nice clip.<br /><br />https://www.youtube.com/watch?v=Bo0w_mA5CJc<br /><br />washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-11987317516965454382015-12-17T20:49:36.466+00:002015-12-17T20:49:36.466+00:00At the end of the last Fed tightening cycle we wer...At the end of the last Fed tightening cycle we were just headed into the GFC. Now they are tightening INTO what looks like a slowdown/recession. Mix in some higher monetary velocity (via 25bp higher Fed target) with no reduction in base money (the banks still need that safety blankie for "stress") and we have a perfect recipe for stagflation. Median CPI is at 2.4% even with commodities having committed seppuku. What happens if commods even half recover? <br /><br />MM - If reminiscing about a rate rise makes you feel old try finding someone who invested or traded through the 70's stagflation.<br /><br /> Marshall Junghttps://www.blogger.com/profile/01494663748081037987noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-54461714276710918782015-12-17T18:37:53.483+00:002015-12-17T18:37:53.483+00:00me think market is waking down to the fact that 4 ...me think market is waking down to the fact that 4 hikes next year ain't exactly the definition of dovish especially in regard to current labor picture - Fed must know they are 6-8 months too lateNicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-55912387056317514102015-12-17T17:36:16.091+00:002015-12-17T17:36:16.091+00:00For fellow LatAm watchers, Argentina devalues the ...For fellow LatAm watchers, Argentina devalues the peso and ADR's rocket, not what I was expecting, but a pro business President is a game changer. Banks look interestingabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-40140642336225988442015-12-17T16:16:41.108+00:002015-12-17T16:16:41.108+00:00MM,
I heard that some of the journos were blocked...MM,<br /><br />I heard that some of the journos were blocked from asking the questions they wanted to by management at their respective stations who wanted to ensure that the average joe could understand their questions.....Doesn't excuse some of the trash that did actually get asked though.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-50174264894996990152015-12-17T16:06:58.963+00:002015-12-17T16:06:58.963+00:00Hey various 'equities up' Anons and Chelse...Hey various 'equities up' Anons and Chelsea fans: You're not singing, you're not singing, you're not singing anymore......YOU'RE NOT SINGING ANYMOREAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-46361432667569187292015-12-17T13:49:54.359+00:002015-12-17T13:49:54.359+00:00Thanks for the comments Booger and MM thanks for c...Thanks for the comments Booger and MM thanks for clarifying the "lay up " questions given to Yellen, I see what you were saying yesterday now. <br /><br />Will equities and HYG decouple from oil for a few weeks now? End of december feels like a good time ... <br /><br />Gold and Silver look to be a good hedge on equities at this point IMO. Bc if equities start rallying in the new year, I think we are in for a nice final plunge in PM's. If the bear case materalizes (Nico) then the nice bottom PM are building should provide a base to go higher. I wonder if there is any way you can construct a good risk reward trade around it, perhaps using optionsabee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-71275627072291597772015-12-17T13:41:07.307+00:002015-12-17T13:41:07.307+00:00I think taking the dollar up into year end is goin...I think taking the dollar up into year end is going to be one of those desperate hail mary punts to salvage the annus hornbills for funds. It certainly doesn't hurt that the santa rally would play into that through the usdjpy channel - I am very, very, skeptical that it will work as well as it did last year though - we shall see.washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-41991275241047398862015-12-17T13:22:33.572+00:002015-12-17T13:22:33.572+00:00I am wondering if there is still going to be a dol...I am wondering if there is still going to be a dollar correction or did we just skip that completely ?Boogernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-33480960480447067322015-12-17T13:15:02.909+00:002015-12-17T13:15:02.909+00:00@Booger "What stops the Chinese from applying...@Booger "What stops the Chinese from applying QE?"<br /><br />The nature of their govt debt market for one - the idea behind govt bond purchases is that the resulting pressure on interest rates and release in lendable reserves then transmits to the economy - in China that mechanism is largely absent in that debt is bank loan dominated, with every provincial govt funded toilet brush factory, steel mill, or coal mine, its own special case, if you will.<br />You are right that there will be some 'stimulus' over there at one point, but it is far more likely to take the form of a PBoC backed facility that repackages the loans to local govts and essentially writes it off.<br /><br />@MM nice summary - I would add this most glaringly obvious question that no one asked - can you point to what data has improved in the last 3 months from the 3 months prior for you to hike now, but not previously?washedupnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16039382803812285092015-12-17T12:47:12.175+00:002015-12-17T12:47:12.175+00:00@ Nico G...its not unlimited. Its limited a: by th...@ Nico G...its not unlimited. Its limited a: by the amount of SOMA securities and B: (more importantly to your point) to 30BB a counterpart.Unknownhttps://www.blogger.com/profile/00101317834469287507noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-88417687976182568762015-12-17T11:57:47.672+00:002015-12-17T11:57:47.672+00:00@ Anon 11.31.... Fed funds futures@ Anon 11.31.... Fed funds futuresMacro Manhttps://www.blogger.com/profile/12324967552369915949noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-13341498731798617262015-12-17T11:51:13.490+00:002015-12-17T11:51:13.490+00:00Also Abee, I noticed your question in Michael Pett...Also Abee, I noticed your question in Michael Pettis's blog, which was a good one and he didn't really address it. What stops the Chinese from applying QE? Their exchange rate, I would guess, but they are slowly letting that slide and decoupling from the USD by stealth (so they think). <br /><br />At some stage the Chinese may well do a QE and Pettis outlines how they could do this and rebalance : by transfers from the government sector to the private sector (government handouts, safety net, privitizations). Chinese or Fed QE would be an incredible signal to go long EM and commodities again. Boogernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-21895600726120215142015-12-17T11:45:08.092+00:002015-12-17T11:45:08.092+00:00I took the day off yesterday so missed the momento...I took the day off yesterday so missed the momentous occasion. They proved they could hike once after 100 cuts, so perhaps there was a lot of high fiving, tickling and a few victory laps after the meeting!<br /><br />Abee: with your query about aud.cad, this may not turn until 1.02 or until the current uptrend line is broken on the downside. I think it is a great long term short from current levels (in the 6-12 month time frame). It is a way of playing aud short without direct dollar exposure. The argument being that cad has had the adjustment based on oil prices vs the AUD which has not adjusted to iron ore prices so much. <br /><br />Aud has bounced recently due to strength in the employment data, which could be decoupling of the Australian economy from resource prices. I think it is more likely just be a tailwind from the property boom there and a lagging effect from the effect of a contribution from net exports to GDP growth in the last quarter (as iron ore prices stayed the same last Q but volumes expanded). I wouldn't expect net exports to be contributing to GDP growth this quarter at all. <br /><br />If one looks at relative pricing based on previous periods, AUD is 0.72, GFC lows were 0.6. CAD has already surpassed GFC lows. AUD.CAD was 0.78 at the GFC lows. I suspect AUD will head towards GFC lows at some stage in the next 18 months and so will AUD.CAD. Australia is currently doing very well and Canada is probably going into a double dip recession. It is certainly possible, but unlikely that Australia will be doing a lot better than it is now and Canada going a lot worse going forward. <br /><br />Given where iron ore, coal, nat gas prices are, aud.usd is getting to be a good value short. Glen Stevens, RBA chap, seemed to indicate to check back in Feb (I.e they are not considering any rate reduction until then) so perhaps people will start looking at shorting AU again in January. The probability of a 1-2 rate reductions in the next 12 months has been scaled back to attractive levels again and there is just the overblown spec short interest to undo, so I am watching that. <br /><br />aud.usd and aud.cad I have high conviction in the short case fundamentally but we just have to wait for the break. usd.cad, I think is starting to get overdone, the technicals are good but the runway is getting less and less.Boogernoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-35865585138401793392015-12-17T11:31:34.664+00:002015-12-17T11:31:34.664+00:00Hi folks, sorry about the extreme ignorance but wh...Hi folks, sorry about the extreme ignorance but what security is MM using for the market pricing of rates in those years please?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34323687.post-40084871710811846502015-12-17T08:20:43.749+00:002015-12-17T08:20:43.749+00:00from the daily shot
The Fed's policy announce...from the daily shot<br /><br />The Fed's policy announcement had one technical detail that didn't get much media attention but is actually quite important. The reverse repo (RRP) rate was not only raised from 5bp to 25bp but the Fed also removed the cap on the RRP facility (which was at $300bn). It means that program participants such as banks and money market funds can place nearly unlimited amounts of cash with the Fed overnight and earn 25bp. The program size is only limited by the size of the Fed's securities holdings which exceed $4.2 trillion. This sets the overnight riskless rate at 25bp which becomes the floor for the Fed Funds rate.Nicohttps://www.blogger.com/profile/06532015745155347229noreply@blogger.com