"Try not to become a man of success but rather try to become a man of value." - A.E.
New York, NY
Joined August 2015
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#BRL Is 3.0% positive carry sufficient to go long BRL here at this point in the cycle?
Agreed. Based on 2yr AUD minus US rates, i would think another 0.50-1.00% of carry favoring USD throws the cross into a higher vol of vol. That kind of move lower in $AUD rates w/out US lower may be tough to envision...
$AUD spot still ~6/7 big-figures below its 20yr avg (so, fairly middle of the road). But fwd points haven’t been this negative since 2000 when spot was in the 0.50s. AUD still looks supported around 0.70. Any thoughts why?
Thx, I think speed of Q4 erosion in financial conditions & liquidity tightening brought recession calls dramatically fwd. Since loosened significantly (30yr home mortgages from ~5% in Nov to 4.25% now). But since we still have QT, unclear fed verbal pivot will be sufficient...
All that risk-on since December. Tell me you can't see it in US 2s10s swap curve? I've circled it so you can see it....looks like the beginning of a real change in trajectory....
Even with technology & free flow of news, it’s hard to appreciate the currents outside you’re own bubble...
Alright, pains me to see this setup but stock market seems very interested in waking up the bond bears. If S&P is heading back to Sep highs, then seems bond yields will too. Get ready for some deja vu...#EM #Credit #mortgages
Japan January Trade: Exports -8.4%y/y vs -5.7 Estimate. Seems like drop in exports to China (-17.4% y/y) overshadowing the pickup in sales to US (+6.8%).
1) Observation: growth & inflation forecasts have been revised down globally over the past quarter
2) Macro drivers of FX such as changes in growth/inflation forecasts have not driven FX returns over the past month; instead, comdty FX & carry have outperformed. Source: JPM Jan18
*NZD inflation.
Kiwi +0.70% stronger...
CPI +1.9% vs +1.8%y/y
Ex-food/energy +1.5% y/y, up from +1.2% Q3
Non-tradable +2.7%
Note: RBNZ said in Nov it wants to see core near 2% before raising cash from record low levels now @ 1.75%. No signalling of imminent hike (late 2020).
Haha! Well, if someone were to have a bold view, not the worst time in the world to express it given...
1)Options mkt doesn't seem to smell smoke (6m RR near flat)
2)Options mkt doesn't see a fire (6m implied Vols <7.0 and on recent lows)
$AUD 5yr FX chart looks like fx is basing BUT be warned of a more compelling short now..
1)housing bubble exposed
2)China's deceleration no longer speculation
3)US late (to very late) cycle now
4)short AUD carry has flipped from very -ive to +ive
5)Vol & riskies relatively muted
*TREASURY DENIES REPORT MNUCHIN PUSHED TO LOWER CHINA TARIFFS
Time left on Munchkin's clock can be determined by half-life formula....
KKR says "We Think that We Are Seeing a Secular Shift in the Relationship Between Stocks & Bonds Back To Pre-2000 Behavior. This Viewpoint Is Significant for What It Means for Macro & Asset Allocation Investors" Hard to see w/out recession but good for alts if right...
