Some thoughts on the dollar (and the myth of dedollarization), the FX outlook for 2024, and some potential fat tails in FX.
While the Iowa caucus can in no way be called a surprise, it seems to have dusted off memories of 2017 and cleared some of the subconscious bias.
Today’s piece is mostly about bitcoin…
… but even if you don’t care about crypto you might find it makes some interesting observations on the behavior of volatility overall. And I believe it contains one of the cooler charts I’ve ever constructed.
The immaculate disinflation and soft landing narrative remain intact, but they’re almost fully priced in and therefore what you are seeing is a lot of chop.
I see risks to the hot side for today’s CPI.
Best plays for hot CPI: Short AUDUSD or long USDMXN.
Best play for weak CPI: Long GBPUSD.
The March FOMC meeting has some interesting nuance. Plus: Taiwan and US election info.
I think these first three days of the week (including yesterday) are noise days as we wait for CPI.
Williams could MAYBE matter tomorrow afternoon.
There is a common pattern where things overshoot into year-end and then reverse in the new year.
I think that NFP is second-tier data right now and therefore a wider-than-usual miss will be required to deliver an orthodox move.
Today I go through an exercise to flesh out how we get to six or more cuts in 2024.
There are many assumptions, but they are not especially heroic.
Catch up with Brent Donnelly and Macro Alf every week on The Macro Trading Floor. Listen as they discuss themes that are moving markets, highlight important trade ideas, and get to the bottom of what’s going on in macro.
John Mauldin, Chairman
Mauldin Economics
One year of good ideas, dumb mistakes, and timeless trading lessons over a wide range of topics like tactics, strategy, mindset, risk management, and of course the psychology of successful trading. Watch real trade ideas come to life in real time.
We teach you how to think, reason, and behave like someone who makes money.
