When markets influence policy, it makes sense that we would mean revert
What country has the most pyramids?
Answer at bottom of page.
highlights
The Reflex
Current Views
Short 07APR EURCHF 0.9010/0.8960 put spread +
long 07MAY 0.9110/0.9160 call spread for 2bps
Idea is that EURCHF holds around here due to SNB intervention and then we rally when the war is over
Watching over lucky clover
At the risk of being a tad hard to follow, I have cut all my longs from Sunday/Monday, and I am back to flat. My core view, I suppose, is that there is policy reflexivity around the $100 level in crude (give or take) and yesterday confirmed that. Now we’re back below $100, the war is still on, and while the market reacted to Trump’s comments yesterday (because they suggested visibility—war will be over soon, but not this week)… The White House view is ummm… Mercurial? When the market stops applying pressure, further escalation is the risk again.
This is a perfect market for short-term trading as the reflexivity between policy and markets has been somewhat predictable and there is enough time to react to headlines—but what if you’re a macro person? You have to take a view at some point on whether oil is going to $150, or it’s not. If it’s not, all the bull trades I suggested yesterday are going to be home runs. If it is, the early toe dippers are going to receive an unwanted metatarsal amputation.
The place in the middle is where I sit. Oil can go up for a while, but there is strong policy reflexivity and so if it goes up too much, policy changes. This will continue until the administration gets bored, or it escalates.
Oracular
In the meantime, I have been paying more attention than usual to tech earnings, and more importantly, the price action after the earnings, relative to how the release looked. The META pop and drop in October was a clear sign of the peak for the AI Capex trade, and subsequent reversals after beat and raises from the likes of NVDA have been common.
Oracle is a particularly interesting setup because people have been hating on the stock for six months, it’s down more than 50% from the goofy days of Fall 2025, and they are trying to rightsize their intergalactic Stargate ambitions. The headcount reductions etc. could be a comforting sign of prudence, or a sign that things are falling apart and there is panic in Austin. Oracle has been stained by the negative sentiment around OpenAI and is generally viewed as a poster child for AI Capex excess / madness and so a super squeezy rally in the stock could tell us AI Capex fears have peaked for now. This might have implications for the beaten-down neocloud names like CRWV and NBIS. See ORCL chart, lotta support $100/$127.
USDJPY
HT NJ for reminding me that we are nearing the strongest seasonal period for USDJPY. This seasonality is incredibly persistent and has been persistent out of sample for 15 years as this was well known back when I worked at Nomura in 2011. Here is the basic pattern USDJPY follows.
That dip in the middle is March FOMC.
Once March FOMC is out of the way, there is heavy selling of JPY for Japanese fiscal year end. This is boosted by bonus payments, too, and so USDJPY rallies from March FOMC until around the 4th of April. The pattern is quite consistent. Here is a table showing change in USDJPY in the 8 days leading up to March FOMC (because we are eight days from this year’s FOMC) vs. the 15 trading days after FOMC (taking us to early April).
I rarely trade seasonality in isolation, but it’s good to know the skew of the flow at times like these. This effect does not come into play until after next week’s FOMC, but I am laying it out here because this stuff is easier to plan around if you know a bit in advance. Note the effect went badly wrong last year as the last day of the bullish window was Liberation Day! Oops. USDJPY peaked on 28MAR last year.
If you were to do this systematically, you would buy USDJPY at the close on FOMC day (March 18), flip short on April 6, and cover the short on April 18.
Final Thought
I am travelling for the rest of this week, so am/FX returns Monday! Have a monolithic rest of the week.
Five countries with the most pyramids (pictures show one from each country, in order)
Sudan 255
Egypt 138
United States 35
Peru 26
Mexico 20
