tag:blogger.com,1999:blog-34323687.post2382046956041809797..comments2024-03-28T12:22:11.704+00:00Comments on Macro Man: Forget It Jake, It's China/Jeff Gundlach aka Macro Clown Jr.Macro Manhttp://www.blogger.com/profile/12324967552369915949noreply@blogger.comBlogger58125tag:blogger.com,1999:blog-34323687.post-46782106464354806972017-05-18T17:42:16.184+01:002017-05-18T17:42:16.184+01:00Full Kevlar body suit and gloves if you are intere...Full Kevlar body suit and gloves if you are interested in Brazil today but this one looks like a five-alarm fire in a tire factory for the moment. EBR-B probably the best long term bet out there, but we are going to sit and watch this burn into expiration at least. Yesterday's USD bleed has been staunched. Capital flight out of BRL into the usual safe haven for Latin America - USD!!<br /><br />One has to question the timing of the EM v DM call from certain eminent punters recently…. Really ?? From this corner, we might venture to suggest that punters should stick to his/her knitting, and focus on fixed income.<br /><br />The last two days have been like this:<br /><br />1) Wake up. Look at rates. [this is every day]. Look at various Falling Knives.<br />2) Think: "thank Heaven I am not a Long-Only Equity Guy".<br />3) Think: "shit. I am glad I only have a tiny sliver of that piece of excrement".<br />4) Think: "this may just be the beginning of more instability".<br />5) Think: "this will put the Fed on hold"<br />6) Look at rates.<br />Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-65227405874140041092017-05-18T15:25:51.836+01:002017-05-18T15:25:51.836+01:00Is it not the time to go long big on Brazilian equ...Is it not the time to go long big on Brazilian equities? <br /><br />BRZU tanked 52%, I know it is a suicidal 3x ETF, but if it bounces back, it is serious money. MANUhttps://www.blogger.com/profile/05662240644818340893noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-10342345400400888692017-05-18T15:21:24.861+01:002017-05-18T15:21:24.861+01:00Here comes the dip buyers. Buy buy buy... Here comes the dip buyers. Buy buy buy... dfdsfiolhttps://www.blogger.com/profile/09424903490091670724noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-78624166793213244682017-05-18T09:57:57.825+01:002017-05-18T09:57:57.825+01:00Leads to me to wonder as anyone ever developed a t...Leads to me to wonder as anyone ever developed a trading system based upon the Menstrual Cycle?checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-44156299646120504322017-05-18T09:57:14.872+01:002017-05-18T09:57:14.872+01:00Financial markets are just like ladies are they no...Financial markets are just like ladies are they not. They have 'that time of the month' ! Some of the outcomes are decidedly similar as well.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-69731987660549690872017-05-18T06:28:03.770+01:002017-05-18T06:28:03.770+01:00It's the unknown that scares markets the most,...It's the unknown that scares markets the most, no visibility going forward. You hit a wall you never saw and it wakes you up, if doesn't kill you. Today is a wake up call for those who chose to ignore what's been said here so many times: Trump will end the stock market rally. Is impeachment a certainty? Probably as certain as the tax reform, not at all. But it's the perception of one that makes the players exit. Try to make a sense out of one day of trading and you are in peril, but put a week of this together and you have a trend, a place where to park your stops, a high to hide behind, a gauge to measure consistent fear. A herd of raging bulls turned into a flock of fearful calves today, leaving a trace of manure on the way to the exit, the same bullshit they were fed to buy it all up.IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-69261553566233672582017-05-18T04:43:02.111+01:002017-05-18T04:43:02.111+01:00ok, trading was a bit rich...but there is a price ...ok, trading was a bit rich...but there is a price fwdemhttps://www.blogger.com/profile/13760547411121707816noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-26957074568202967712017-05-18T04:37:51.260+01:002017-05-18T04:37:51.260+01:00grt tks, explains why MXN is the laggard, re BRM7 ...grt tks, explains why MXN is the laggard, re BRM7 as there is no spot market in BRL where do they get the price from? Is there somekind of reference (probably onshore?) like spot if for other currencies ? Or is it really people only trading on CME and everything else closed?fwdemhttps://www.blogger.com/profile/13760547411121707816noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-43222127757683646872017-05-18T03:59:05.922+01:002017-05-18T03:59:05.922+01:00fwdem, maybe it's that Brazil is going to be a...fwdem, maybe it's that Brazil is going to be a sh1t show tomorrow. O Globo reports that the Carwash probe has turned up a tape implicating Temer. Kiss goodbye to pension reform and all that. Hardly trades but the BRM7 currency futures are down over 5% right now.<br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-91350437046296078192017-05-18T02:15:27.944+01:002017-05-18T02:15:27.944+01:00holy... what's happening in EM currencies this...holy... what's happening in EM currencies this night?fwdemhttps://www.blogger.com/profile/13760547411121707816noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-73163636203146978392017-05-17T23:54:21.104+01:002017-05-17T23:54:21.104+01:00Special prosecutor -- draws a line under this for ...Special prosecutor -- draws a line under this for now?johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59143448064162766192017-05-17T22:33:55.551+01:002017-05-17T22:33:55.551+01:00It probably was NOT a good day for the Vol selling...It probably was NOT a good day for the Vol selling Bros down at the Good Ole Boy state pension fund…. who knew being short vol of vol was risky?Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-16818654400354082702017-05-17T22:28:33.740+01:002017-05-17T22:28:33.740+01:00Leftback: Is this the gap that doesn't get fil...Leftback: Is this the gap that doesn't get filled (for a few years?)<br /><br />I tend to agree. There are lots of gaps that the market created on the grind higher. I reckon those will be filled before this gap is filled. <br /><br />One of my mates at a large fund was talking about how the Russians need capex in oil industry which requires higher oil prices and so they are likely to comply with cuts. I'm skeptical, but just thought I would fyi.dfdsfiolhttps://www.blogger.com/profile/09424903490091670724noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-63467569735733609562017-05-17T20:18:56.438+01:002017-05-17T20:18:56.438+01:00Filling up some more space ...
2s10s has broken b...Filling up some more space ...<br /><br />2s10s has broken below the pre-election level. I'm not a big charts guy, but I think it's significant when you retrace and then break through the level existing before a major catalyst/narrative for a market. You won't catch me owning any US bank stocks, man (though I do own WFC and BAC "L" preferreds).<br /><br />This Comey thing isn't going to die. We're probably looking at weeks/months of uncertainty. I'd think probability of tax cuts/reform is now materially lower, however, there is a narrative that Congress is going to feel very pressured by the 2018 midterm elections to pass something, maybe more so now. Even if that's true, it probably also means whatever gets passed is going to be a lot more modest than otherwise. Mitch McConnell can and will say "no."<br /><br />Yesterday's Heard on the Street on China was worthwhile. Agree with the view there, that China cycle has turned, but 1) AAA-versus-AA spreads are not signalling heightened fundamental risk and 2) the PBOC is stepping in now with liquidity, which is what you'd expect if you believe (as I do), that they are not going to risk anything like a hard landing prior to October.<br /><br /><br /> johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-36770864278956961542017-05-17T18:02:15.890+01:002017-05-17T18:02:15.890+01:00Big question is: do you buy EM fixed-income driven...Big question is: do you buy EM fixed-income driven currencies here? Equity-driven FX seems ambiguous because you have lower US growth effects cutting against the benign rate effects. But fixed-income driven EM currencies look less imperiled by US rates now. USDMYR which I've mentioned here before historically correlates well with fixed income flows, for example.<br /><br /><br /> johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-1567706787818821892017-05-17T17:00:56.735+01:002017-05-17T17:00:56.735+01:00Johno
Re the Uk I'd be les interested in the p...Johno<br />Re the Uk I'd be les interested in the politics and more interested in the property market. It is not an accident that in 2013 and prior people were talking about the Uk as 'the sick man of Europe'. Given it's skew towards finance and property how could it not be. It is not an accident that within 12 months the government had stepped allover the housing market with policy and suddenly Lo people cannot praise the Uk growth enough. Within that context our property oriented boom is over. Transaction volumes are dropping and nothing short of further major policy intervention is going to stop it. Without that engine firing the UK growth rate will be hard to sustain.checkmatehttps://www.blogger.com/profile/03688082792316894545noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-73425451418981995022017-05-17T16:42:54.991+01:002017-05-17T16:42:54.991+01:00A good day for LB. Kicking myself for not selling ...A good day for LB. Kicking myself for not selling USDJPY, but at least cut lose my buxl short at good levels. Only so much you can expect at two in the morning local time, perhaps.<br /><br />I think the Trump news means you put lower odds of stimulus/tax legislation passing, which means the 2019 part of the forward curve (which is most sensitive to some over-heating), in particular, should rally. Roughly that's what we're seeing (actually more centered around 2020). One thing I'd add. I don't have much contact with high-up Washington types, but one I spoke to last month told me the key man to watch is Mitch McConnell. People here might take note of his interview with Bloomberg yesterday, which pushes back hard against Trump's tax plan. Anyway, clearest implications are for rates.<br /><br />Market likes the EIA #s but I'm not sure these are the #s one should chase.<br /><br />Notable that we've had some liquidity injections in China, finally, and the coal/iron/steel complex has caught a small bid.<br /><br />Re the UK, anyone see that Bloomberg article on the candidates May is selecting to run? Seems to counter the narrative that the election allows her to sidestep the hard-Brexiters when negotiating with the EU. Anyone have thoughts on that? Reading the article certainly made me less constructive on GBP.<br /><br /><br /><br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-82672247117815036212017-05-17T16:30:36.594+01:002017-05-17T16:30:36.594+01:00WTI is hopping again. I'll sell another 1/3 of...WTI is hopping again. I'll sell another 1/3 of my original long @ 50, leave the last 1/3 for 52 target and move the stop up to 47.90<br /><br />abee, I hope you did not buy AEO, ouch!! Even a 6-yr support @ $10 may not hold with a report like today. $8.50 after that.<br /><br />Gold is shining. Buy more GC and GDX. The egocentric lunatic did it again! How many lives does this cat have? More importantly, what happens to consumer confidence and pretty much the whole economy when half of the country has no president they voted for? <br /><br />Leftback, great trade on TLT! Citigroup Economic Surprise Index is driving the 10-yr yield.<br /><br />http://www.yardeni.com/pub/citigroup.pdfIPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-9353951623042069702017-05-17T14:53:39.114+01:002017-05-17T14:53:39.114+01:00Is this the gap that doesn't get filled (for a...Is this the gap that doesn't get filled (for a few years?). One never knows until after the fact. Likely there will be some dip-buying enthusiasts out there… our guess is that the dip does get bought into Friday's expiration, before a summer swoon resumes.<br /><br />Nice work on WTI by those who caught the 10%+ move off the bottom. It's probably not a great day to be long though. Crude remains arguably (and perhaps this is correct) in a trading range - but with the possibility of a move into an even lower trading range, which obviously impacts inflation expectations, and therefore both US rates and the USD.<br /><br />Of course we are one of the resident fixed income specialists here, so you'll be pleased to hear we have remained long through the last few weeks and even added to our longs almost every time the 30y > 3.00%. It would take a big change in sentiment and a substantial panic in equities for us to begin lightening up on bonds. Even the media are now walking back the inevitability of a June rate hike. This could be a very typical US summer fixed income rally, we have seen a few.Leftbackhttps://www.blogger.com/profile/07728096415928915882noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-56180398771858698572017-05-17T14:53:09.534+01:002017-05-17T14:53:09.534+01:00Johno, on Zar, the commentary I read was that the ...Johno, on Zar, the commentary I read was that the market sees Zuma as a lame duck now, and are just waiting 2 years for him to be gone and someone better ..... abee crombiehttps://www.blogger.com/profile/13320039155613443039noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-67555913134919486792017-05-17T12:41:49.406+01:002017-05-17T12:41:49.406+01:00Those who were lucky to get filled at 48.05 that I...Those who were lucky to get filled at 48.05 that I mentioned on WTI should move the stops up now. Who knows what EIA holds for us. Take some off here too, risk off, ain't it?IPAhttps://www.blogger.com/profile/14823892667440934141noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-59954032479517709852017-05-17T11:08:19.676+01:002017-05-17T11:08:19.676+01:00Took off my buxl future short 165.2-ish and some E...Took off my buxl future short 165.2-ish and some EMFX.<br /><br />I'm no great judge of these things, but this doesn't look great for Trump. Have dialed down the risk a bit here. Anyone see especially good analysis? From what I've seen, institutions were expecting tax cut/reform next year, not this year, but if we have impeachment proceedings, then all legislative bets have to be off.<br /><br />Funny thing is just last week the acting FBI head said "there has been no effort to impede our investigation to date." NYT says that he was referring to Trump campaign/Russia but Flynn/Russia is separate (I find it ridiculous that McCabe would have let the latter go unmentioned when asked the question about the former, but WTF do I know?).<br /><br />Was the remark to Comey "obstruction of justice?" Maybe. To me, it isn't clear-cut either way. Impeachment is a "quasi-judicial, quasi-political process" as was written in the press somewhere, so a Republican Congress is going to interpret this favorably for Trump, right? That he was speaking "solely out of sympathy or good will for Flynn," to quote someone else. Still, it seems like the wheels are in motion for stuff to come out. And do we see a special prosecutor appointed, and what are the implications of that?<br /><br />johnohttps://www.blogger.com/profile/11356400378252164259noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-37445866923253452212017-05-17T00:47:56.090+01:002017-05-17T00:47:56.090+01:00risk off- hit the ZAR button!risk off- hit the ZAR button!fwdemhttps://www.blogger.com/profile/13760547411121707816noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-662024394709730622017-05-16T22:58:34.878+01:002017-05-16T22:58:34.878+01:00China...
So the expansion in credit in China has ...China...<br /><br />So the expansion in credit in China has been driven into the commercial, corporate, SEO, SME sector. Less so retail, or at least mortgages were already pumped. So, the authorities are tightening the bank lending, but much expansion runs through shadow lending. They can't take deposits but raise funds through retail bonds/investments. Risk here is they borrow short lend long. So the risk is a similar problem to 2009 in the West happening in China which would mean the PBOC would step in and provide liquidity to replace any runs on 'deposits' and resume confidence in the system.<br /><br />Interestingly, inflation is not high in China, so this credit expansion is not finding its way into the real economy? Suspects are propping up the revenue line in loss making SOEs. Second place is speculation. How about that rapid run up and crash in Chinese shares, commodities and now bitcoin? The credit liquidity is sloshing around chasing the latest asset craze. Also Chinese have sent a lot of money abroad to buy foreign property.<br /><br />So, eventually the credit growth has to stop. Then 6% growth is off the table for a couple of years while it works through.<br /><br />Timing? Market thinks not this year with the National Congress on the way<br /><br /><br /><br />TraderJimhttps://www.blogger.com/profile/17870637335405087110noreply@blogger.comtag:blogger.com,1999:blog-34323687.post-58694438997979717972017-05-16T21:42:28.394+01:002017-05-16T21:42:28.394+01:00Johno, I'm by no means an expert in ZAR tradin...Johno, I'm by no means an expert in ZAR trading but I get occasionally involved there. My impression is, ZAR is seen by many as the ultimate EM risk currency, whatever flows happen in EM get expressed via ZAR, of course there are phases when ZAR trades on its own, that's when something idiosyncratic to SA happens, but most of the time it's ignored and the SARB seems completely oblivious to where ZAR trades. Not that I agree with the way ZAR is traded, but the perception is that the rest of liquid EM has lots of BIG political risk involved, has a central bank that can get nasty or is in a uncomfortable time zones. Ultimately ZAR will blow up bigly, but you don't want to short it and see it going down to a 10 handle...fwdemhttps://www.blogger.com/profile/13760547411121707816noreply@blogger.com