Big news. Conventional wisdom would say this is massively risk-on - 1) a swift reversal in all retaliatory measures may have come as a slight surprise, and 2) the 1-year truce will now lift a huge veil of uncertainty that has weighed on economic activity for the majority of
Trump, China, and trade - why this will be the overriding driver of markets and likely to extend the bull run in risk. Returning to a popular USD framework. A longer-term thesis for the USD. Game plan
Flippage - Was bearish risk this time last week, but a TACO headline and Trump confirming the meeting with Xi would go ahead to result in trade tensions simmering down till the end of the month, as well as how the charts have evolved over the last week has shifted my view on risk.
A Volmageddon-esque Setup?
Pay close attention to real-rates...
Market expectations are colliding with shifting economic data, policy uncertainty, and geopolitical risks that together, may well set the tone for the weeks ahead.
Seasonal volatility never came, stocks are raging higher, fed delivered a cut, economic data has been good. Strange as it may sound, I think the biggest risks to all of those is that the good times keeps rolling on further that would prompt a tightening response in the rates market.
Some thoughts on major narratives showing signs of exhaustion into potential turning points around FOMC and OPEX, and for a major economy for a compelling trade call.
A lot of downside risks is in the price, and seeing strong potential of a mispricing and misplaced growth-concerns.
Expectations extremely dovish, vols somewhat muted, economic growth robust, fincon easy; for a highly critical week or two that has the potential to cause a polarising shift in sentiment from a cut in September to the possibility of no cuts at all this year, market appears ill-prepared.
Growth is strong and you're dovish?
“Markets are just positions” ‘X’ has been very busy dissecting and opining on Powell’s Jackson Hole speech this weekend, and what stood out to me in particular is the many views that pointed to the price action to substantiate their view. We believe this is wrong without understanding the