Thread by @MacroTechnicals

MT GLOBAL MARKETS Momentum & Sentiment weekly 21Jun20 recap wk25 / focus wk26 thread 1/n

• hope everyone enjoyed UK fathers day ;-)

• actually a positive Risk week, although from Monday ramp up then stay range

• Macro "catching" up

• but noise gets louder of CV19 2.0 ?

2/ Germany headlines R0 from Friday 1.06, Sat 1.79, Sun 2.88

really ? country wide ? There are some areas in East Germany with nearly 0 cases since it started.

let's see how this develops, I am not so much worried about cases, but how govt REACT again

news.sky.com/story/coronavi…

3/ well, we all saw on TV what happened lately anyway, huge (global) demonstrations, and now a campaign rally in Tulsa, where in other areas like where I live, barbers and restaurants are not even allowed to open.

if (IF) this started CV19 2.0 we know why.

4/ but this made me absolutely chuckle ... the ruler allows us lemmings to come closer, from 2m to 1m.

HOW GRACEFUL ! THANK YOU !

LOLZ

5/ many will disagree, I don't mind, but somehow I have a feeling, that some markets are sort of re-coiling and waiting for a trigger (maybe what I mentioned earlier? = the govt RE-action again?)

here are US10Y...

6/ ...or US notes Futures...

7/ ... precious Gold. ( and I am not a gold bug), but in context of the recent mega stock market rebound rally... XAU never looked back since the equity sell-off margin liquidation phase. and keeps pushing the resistance.

knock knock ?

8/ ... NDX at ATH, really really impressive and I missed it. so what ? nobody is perfect.

And I understand FED, QQE, unlimited and ZIRP etc, but even this rally starts to look stretched without knowing what the current fair value could be. Regression channel was tested

9/n credit default swap indices tightened further this week, but what struck me - and have to check deeper - the CDX NA High Yield actually soared 14bp , and EM with more tailwind tightened 77bp ?

10/ because, even though they are in a different family, but the risk premium EM - CDX NA IG collapsing, and on the other hand CDX NA HY - EM soared.

11/ last week US NY empire, Philly Fed, German ZEW, US retail sales all further improved on re-opening the businesses... so did US housing permits.

but, let's be clear, some of these data, even lagging and improving, are still in recession territory.

here below permits vs XHB

12/ after previous chart Y/Y , here is the comparison housing permits vs XHB ETF...

spurious correlation, nevertheless, market is ahead of it.

13/ losing steam was last week's US jobless claims numbers.

initial still 1.5+ mln

continued still 20.5+ mln

well, NOBODY wants to flatten THAT curve !

14/ moving towards UK...

I found this compilation of UK retail sales headline numbers...

grasping for straws or what is this about ? yo-yo extreme.

But I heard of long queues on the weekend, as "non-essential" shops re-opened. Expect another "record" jump for June data then

15/ last week had a rather interesting BoE meeting as they increased QE bond purchases by +100£bln.

bit of a knee-jerk reaction in £LIBOR and Gilts.

GBP weakened across the board, but the whole week. b4 and post BoE

16/ FTSE didn't care... they trade (well, at least for the last week anyway) in tandem with the big boys = SPX. Right side of the double chart shows that very clearly. ZERO reaction on BoE

17/ fun chart: BoE base rate in historical context...deep in a hole and keep digging. Since GFC and now with the destruction of the economy/shutdown due to GVC. Will they ever raise rates ?

Right side 2s10s yldcrv re-steepening, and 3M £LIBOR with a tiny hope for a rate CUT.

18/ good news after the panic, demand for US$ emergency swap lines coming off rapidly now.

ft.com/content/6d3cba…

19/ update on global market cross asset performance heatmap 1wk, 4wks, YTD and the Momentum/Trend/Exhaustion scores as of wk25

20/ next week macro:

first: centralbank action. RBNZ Wednesday. Looks like only one rate cut expected = Turkey, all others remain dovish but unchanged rates

21/ next week "flash" Manufacturing PMIs, as they literally catch up with re-opening, they all expect to improve but also remain in contraction mode

22/ ditto for "flash" Services Sector PMI next week. expectations for improving but remaining in contraction

23/ next week - besides flash Manufacturing and Services PMI, a bunch of Consumer Confidence releases.

Most relevant Uni of Michigan, after "flash" was +6.6 improvement to 78.9.

24/ next week's German IFO is expected to improve too, though still in recession mode as well...

25/ further US macro next week... mother of all lagging, GDP Q1. But ammo for algos and scalpers

26/ what else ?

Wirecard. We all seen the stock chart (dropped 75% or so in 2 days, CEO resigned, accounting scandal ... It is a DAX30 member (1.4% weight)...

here is the only bond I am aware of. They issued that JUST 9 MONTHS ago ! now trading at 35% of par or 29% yield

27 and this:

2020, the "unprecedented" CV19 , market sell-off, panic, shutdown, global centralbank / fiscal rescue packages...

Here is a perfect recap, displayed in the Bloomie Billionaire Index... TECH vs the REST (industrials/retail/etc)

gainers vs losers

28/ this also ended my USO thread I started in April.

"good luck"

https://twitter.com/MacroTechnicals/status/1255156683086557187

29/ END

good luck for next week.

cheers everyone.

30/ @threadreaderapp unroll