Been a while since i posted some charts but looking at the past two weeks, it feels like that ship. Market is stuck in a glut and doesn't where to steer.
1/x
1/x
Fed pricing is almost unchanged. Guess we need to see jobs inequality or inflation. As expected this is the waiting part of the pricing. No new info and Powell and co will hammer their nails so you don't jump the gun.
Other CBs trying same.
2/x
Other CBs trying same.
2/x
But looking at the Fed surveys, the outlook is rosy. Activity is strong, employment tight and the prices paid are the highest in recent records.
3/x
3/x
But there is still a lot of slack to come off. Subway usage in NY is picking up very slowly.
And capex expectations are high but I would have thought higher for choice. But maybe they are waiting for the Biden infrastructure plan. Or for more microprocessors.
4/x
And capex expectations are high but I would have thought higher for choice. But maybe they are waiting for the Biden infrastructure plan. Or for more microprocessors.
4/x
I still believe the Fed pricing needs to increase, and the curve will steepen as well. But I hear the stalling in the face of no new info. It's ok I'm a strong believer.
I prefer 5s30s and 1s3s here to 2s5s. If stuff happens it will force the Fed now, not the terminal rate.
5/x
I prefer 5s30s and 1s3s here to 2s5s. If stuff happens it will force the Fed now, not the terminal rate.
5/x
quick note on the 20y after a meh auction. Was pointing the other week to how cheap it was and well the auction was the bottom.
Still cheap but then there are many reasons for that and I am no treasury digger.
6/x
Still cheap but then there are many reasons for that and I am no treasury digger.
6/x
Now FX is the same meh. Waiting for inflation prints to tell me something I dont know (base effects thank you but I want to see if OER is moving - that's the spooky one).
5y5y real rates are back above 0 but even the 2y2y are still compressed way below 0.
7/x
5y5y real rates are back above 0 but even the 2y2y are still compressed way below 0.
7/x
What I don't like here is France and Europe generally. My honeymoon with Macron is over and when I see the vaccine roll out and SURE funds disbursement I struggle to not shake my head.
Macron is sliding down the polls and the covid situation is not getting any better.
8/x
Macron is sliding down the polls and the covid situation is not getting any better.
8/x
We are likely to see EUR return as a funder and the rates are normalising fast.
EURUSD 1Y downside stays cheap. What has moved is actually the topside.
9/x
EURUSD 1Y downside stays cheap. What has moved is actually the topside.
9/x
The other thing to be careful about is USDJPY.
The buying in tokyo hours has stopped and USDJPY fell a bit on that but is still lively. And there's not that much topside in the books after Fiscal Year End.
10/10
The buying in tokyo hours has stopped and USDJPY fell a bit on that but is still lively. And there's not that much topside in the books after Fiscal Year End.
10/10
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