MT GLOBAL MARKETS Momentum Weekly Recap wk42 as of 18Oct19 - thread 1/n
• BREXXXIIIITTTTTTTTtttttzzzzz (today a whole section with charts)
• RiskOn continued w/ plunging VIX,steep contango,strong tightening in CDX HY, ITRAXX XO & FinSubs
• next week flash PMI, IFO, UoM, ECB
• BREXXXIIIITTTTTTTTtttttzzzzz (today a whole section with charts)
• RiskOn continued w/ plunging VIX,steep contango,strong tightening in CDX HY, ITRAXX XO & FinSubs
• next week flash PMI, IFO, UoM, ECB
2/ let's start with BREXIT
3/ in hope for finally everyone agree on a deal... GBP rallied across the board and yields rose...
4/ ...so, basically "RULE BRITANNIA"
... FTSE250 in favour of a deal, Gilts dropped like a stone (actually that was global on reflation theme)
... FTSE250 in favour of a deal, Gilts dropped like a stone (actually that was global on reflation theme)
5/ GBP vola spiked until Friday ahead of "Super Saturday" - which was yet another defeat of he 3rd meaningful vote.
so, GBP obviously won't like it ("weekend trading" LOLZ shows 1.2840/80 -0.6%) but no-deal is back on the probability table.
so, GBP obviously won't like it ("weekend trading" LOLZ shows 1.2840/80 -0.6%) but no-deal is back on the probability table.
6/ Cable 25D RR got absolutely hammered as market priced in the Super Saturday deal.
but then...nope. 322/306
but then...nope. 322/306
7/ the previously extreme positioning according to CFTC COT reports also added fuel to the recent GBP rally on short covering ahead of the EU-UK deal.
8/ UK corp credit spreads tightened...
EVERYTHING LOOKED SO GOOD...
then Saturday 322/306
EVERYTHING LOOKED SO GOOD...
then Saturday 322/306
9/
10/ let's move on...
Global Yields : mixed picture, but with FED starting the T-Bill purchase program and FOMC back to 91% 25bp cut probability, curve keeps steepening.
Germany front and long end under pressure on fiscal stimulus rumours
BoK cut rates again as expected
Global Yields : mixed picture, but with FED starting the T-Bill purchase program and FOMC back to 91% 25bp cut probability, curve keeps steepening.
Germany front and long end under pressure on fiscal stimulus rumours
BoK cut rates again as expected
11/ FX matrix ... of course British Pound was the top scorer for the week and the month across the board. (before 322/306 of course)
12/ Turkish Lira rebound during the week on cease fire and gained 1.6% vs USD
13/ Credit Swap Indices CDX and ITRAXX continued the recent RiskOn theme, especially higher risks HY, XO and Fins Subs
14/ tongue-in-cheek CDX/SPX YoY model still shows divergence or let's say potential upside or let's say Credit spreads is not a threat for a SPX sell-off right now.
15/ and SPX vola VIX got decimated yet again and left a current steep contango curve.
not sure if this is complacency and silent before a storm, but this is the current status-quo = calmed down
not sure if this is complacency and silent before a storm, but this is the current status-quo = calmed down
16/ and US stocks breadth (NYSE and S&P1500) are making new highs at the moment.
17/ my pathetic attempt to keep track of FED running repo facilities shows O/N were reduced by 16.8bln and together with the 4 rolling term repos, it's currently at 189bln
18/ ...meaning, FED is still trying to control the liquidity / reserves mess-up, rates came down, TOMO program is in place, T-Bill program started. Balance sheet "organically grew" to near 4Trln again.
19/ what else ? US permits
came better than expected, but lower than last month, but overall at healthy +7.7% YoY
shouldn't be a surprise with rates way off since 12months and unemployment rate at 50Y or so low
came better than expected, but lower than last month, but overall at healthy +7.7% YoY
shouldn't be a surprise with rates way off since 12months and unemployment rate at 50Y or so low
20/ ..the permits at +7.7% YoY due to low UE rate and slashing mortgage rates, lifting all boats on home builders like ITB or XHB.
XHB has a strong performance, but the YoY mega rally is also due as Oct2018 was near the bottom, so on a relative basis this looks like a anomaly
XHB has a strong performance, but the YoY mega rally is also due as Oct2018 was near the bottom, so on a relative basis this looks like a anomaly
21/ already posted this during the week, but here again, the yet another drop in Germany's ZEW survey (analysts that is, not business owners).
Germany's DAX though is clearly driven by tariff/trade hope with China/US as well as BREXIT deal hope (before 322/306)
Germany's DAX though is clearly driven by tariff/trade hope with China/US as well as BREXIT deal hope (before 322/306)
22/ which reminds me on my late Sales colleague who covered the APAC central banks during our 1997-2001 Singapore time.He was 25Y my senior and sadly passed away years ago.He always said "Belgium leading index is a great gauge for Europe overall".Recently bit volatile.Due next wk
23/ wrapping up part1, Global Markets YTD
24/ wrapping up part2 , Global Markets momentum/trend/exhaustion scores FWIW
25/end that's all folks.
PS: as of writing, England is still in the Rugby worldcup (WELL DONE !!!) and UK is still in the EU (how about a new delay, new referendum to ask if people want a new referendum with the deal everyone knows now)
PS: as of writing, England is still in the Rugby worldcup (WELL DONE !!!) and UK is still in the EU (how about a new delay, new referendum to ask if people want a new referendum with the deal everyone knows now)
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