Throughout this cycle, the reaction to CPI data has been more important for future direction than the data itself.
This week saw a continuation of the drop in US yields as the market is pretty badly offside and rate cut expectations are mounting all around the world, especially in Europe.
Today I look at an evolution in my thinking about correlation and mediators of correlation.
Long USDJPY trades seem to be unwinding into very few buying hands, and I’m going long EURCHF.
On a 2- or 3-day time frame, risk/reward on short euros is not great right here.
Looking at some policy implications for 2024, as well as the year ahead for CHF.
Most/all assets, recently, have had the tailwinds of seasonality, macro, and positioning. Now it feels like those tailwinds are mostly gone.
The immaculate disinflationary landing remains as the data points to continued falling inflation around the world with robust employment and demand.
ISM might have some downside skew, or maybe not. Also a loaded event calendar for next week.
Talking about Global R* versus secular R*, and why EUR might be a good short next year.
Talking about gold today. There’s a strong possibility gold will explode higher from here, and the returns from ATH in gold are generally great.
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