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Oct 31, 2021 โ€ข 17 tweets โ€ข 8 min read โ€ข Read on X
๐Ÿปโ™‰๏ธโ†—๏ธโ†˜๏ธโ†”๏ธโš ๏ธ๐Ÿšฉ๐Ÿ”บ๐Ÿ”ป๐Ÿงฎ

Global Macro Review - October 2021

1/15

Crude ๐Ÿš€ along with domestic equities as vol โ†˜๏ธ

The 10/2 curve โ†—๏ธ then โ†˜๏ธ sharply with short-end ๐Ÿš€

Grains โ†—๏ธ with ๐ŸŒฝ &๐ŸŒพ๐Ÿ’ช๐Ÿผ

AUD ๐Ÿฆ˜๐Ÿ”บ and JPY ๐Ÿˆน ๐Ÿ”ป

Letโ€™s dig in to the ๐Ÿงฎ!
2/15

Commodities led the #inflation trade higher with the $CRB +3.83% and a new cycle high.
3/15

๐Ÿ›ข and โ›ฝ๏ธ ๐Ÿš€ to new cycle highs while Natty ๐Ÿช“ at 6.47

$WTIC 83.57 +11.38%
$BRENT 84.38 +7.46%
$GASO 2.37 +8.22%
$NATGAS 5.43 -7.52%

Chart: $WTIC +11.38% for October is up 72% in 2021
3a/15

$NATGAS -7.52% found resistance at the February 2014 ๐Ÿ” and โ†˜๏ธ

The question remains, does Natty have ๐Ÿฆต๐Ÿฆต to break thru?

Chart: 10-year chart of $NATGAS
4/15

SILVER led metals higher in October but along with the others remains ๐Ÿป trend (3-month price momentum)

$SILVER 23.95 +8.62%
$COPPER 4.37 +6.85%
$PLAT 1021 +6.06%
$GOLD 1784 +1.53%

Chart: COPPER thwarted at 4.82 and is now -2.46% over (T) duration
5/15

Grains with a โ†”๏ธ performance, but only $SOYB remains ๐Ÿป trend

$WHEAT 773 +6.51%
$CORN 568 +5.87%
$SOYB 1249 -0.52%
$SUGAR 19.29 -2.82%

Chart: $CORN ๐ŸŒฝ is +4.22% over (T) duration โ™‰๏ธ
6/15

UST yields were a tale of two durations as the 10/2 curve ๐Ÿ” at 129 BPS on 10/08 and ๐Ÿฅž the balance of the month to close at 106 BPS

2Y .501 +21.9 bps
5Y 1.185 +20.5 bps
10Y 1.561 +5.8 bps
30Y 1.939 -12.4 bps

Chart: $IVOL -1.53% as the ๐Ÿป steepener trade failed ๐Ÿ˜ฐ
6a/15

The MOVE 75.45 +14.38 points on the month, suggesting a nervous and hedge bond market coming into #FOMC and #NFP this week.

Chart: YTD MOVE index matching the February high
7/15

Convertibles and long duration bond ETFs โ†—๏ธ on the month

CWB +3.08%
TLT +2.34%
TIP +0.77%
LQD +0.34%
BND -0.08%
IEF -0.51%
HYG -0.64%
IVOL -1.53%

Chart: CWB a TSLA beneficiary
8/15

Major #fx currencies showed some vol towards month end, as AUS EUR CAN all indicated the end of QE or outright โ†—๏ธ rates.

$USD 94.12 -0.13%%
$GBP 1.369 +1.63%
$EUR 1.156 -0.17%
$AUD 0.752 +4.01%
$USDCHF 0.915 -1.82%
$USCAD 1.238 -2.37%
$USDJPY 113.99 +2.44%

Chart: $FXA ๐Ÿš€
9/15

Volatility drained โ†˜๏ธ as equity investors remained โ™‰๏ธ - not sharing the ๐Ÿ˜ฑ of bond traders

$VIX 16.26 -6.89 pts
$VXN 19.64 -7.01 pts
$RVX 22.08 -6.81 pts
$VXEEM 20.19 -8.70 pts

Chart: $VIX remains ๐Ÿป and near cycle lows
10/15

Fueled by the decline in long duration bonds, large growth lead US equities โ†—๏ธ โ™‰๏ธ

$COMPQ 15498 +7.27% ATH
$SPX 4605 +6.91% ATH
$IWM 228 +4.25%

Chart: $COMPQ +5.63% over (T) duration and +20.25% YTD
11/15

Top US sectors:
XLY +12.09%
XLE +10.33%
XLK +8.18%
XLB +7.6%
XLRE +7.58%

Negative alpha
XLC +0.24%
XLP +3.5%
XLU +4.74%

Chart: Tesla was the ๐Ÿ”ฅ behind the out performance of $XLY
12/15

It was a โ†”๏ธ bag in major internatโ€™l market indices

$CAC 6830 +4.76%
$HSI 25377 +3.26%
$DAX 15689 +2.81%
$SSEC 3547 -0.58%
$NIKK 28893 -1.9%
$KOSPI 2971 -3.2%

Chart: $KOSPI remains ๐Ÿป (t) -1.61% and (T) -7.23% and has been a great short
13/15

Top performing country ETFs
IDX +8.62% ๐Ÿ‡ฎ๐Ÿ‡ฉ
EWC +7.84% ๐Ÿ‡จ๐Ÿ‡ฆ
NOR +6.84% ๐Ÿ‡ณ๐Ÿ‡ด
EWD +6.82% ๐Ÿ‡ธ๐Ÿ‡ช

Worst performers
EWZ -8.75% ๐Ÿ‡ง๐Ÿ‡ท
EWJ -2.63% ๐Ÿ‡ฏ๐Ÿ‡ต
EWY -1.45%% ๐Ÿ‡ฐ๐Ÿ‡ท

Chart: $IDX +8.68% (t) and +14.75% (T) โ™‰๏ธ โ™‰๏ธ
14/15

So, as we ๐Ÿ‘€ ahead to November, you need not look far to see what stands in the way of this #reflation trade.

#FOMC on Wednesday and #NFP on Friday.

The big โ“

Will the #FOMC do its job to โ†˜๏ธ #inflation, as we clearly are at full employment
15/15

The bond market sees rates โ†—๏ธ and future #growth and #inflation โ†˜๏ธ - hence the ๐Ÿฅž curve and the โ†—๏ธ MOVE

Equity investors showing no ๐Ÿ˜ฑ with VIX 16

Letโ€™s see what unfolds.

Meanwhile have a great ๐ŸŽƒ!

โ€ข โ€ข โ€ข

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More from @tdarling1

Aug 29
Hello PCE Friday!

PCE is the Fed's preferred inflation measure

Consensus estimates:
Headline PCE +2.6% y/y, +0.2% m/m
Core PCE +2.9% y/y, +0.3% m/m

With GDP revised higher, PCE today and NFP on 9/05 take on more importance re: rate cuts on 9/17

Let's dig into the market ๐Ÿงฎ! Image
Asia closed a ๐Ÿ’ช month with $SSEC + 7.9%

$NIKK 42717 -0.25%
$SSEC 3858 +0.35%
$HSI 25107 +0.45%
$KOSPI 3186 -0.3%
$IDX 7851 -1.3%

Australia โ†”๏ธ
$ASX 8973 -0.1%

Bharat โ†”๏ธ
$BSE 80095 unch
Europe limps into month end with DAX neutral trend

$VSTOXX 17.53 ๐Ÿ”บ

$DAX range = 23646 - 24606 โ†”๏ธ
$FEZ range = 59.76 - 61.98 โ™‰๏ธ

$DAX 23912 -0.6%
$FTSE 9193 -0.25%
$CAC 7715 -0.6%
$AEX 899 -0.45%
$IBEX 14964 -0.95%
$MIB 42272 -0.4%
$SMI 12172 -0.35%
$MOEX 2894 -0.65%
Read 11 tweets
May 6
Hello Tuesday!

Trump 2.0 induced US economic uncertainly has reached record highs, exceeding even the pandemic

But there is one thing for certain, as the FOMC gathers today, Fed Funds will remain unchanged tomorrow

Let's dig into the market ๐Ÿงฎ! Image
China is back and Asia closed โ†—๏ธ

$NIKK 36831 ๐Ÿšซ
$SSEC 3316 +1.15%
$HSI 22663 +0.7%
$KOSPI 2560 +0.1%
$IDX 6901 +1.0%

Australia โ†”๏ธ
$ASX 8151 -0.1%

Bharat โ†”๏ธ
$BSE 80660 -0.15%
Europe โ†˜๏ธ on PMIs ๐Ÿ”ป

$VSTOXX 20.97 ๐Ÿ”บ

$DAX range = 21448 - 23841 โ™‰๏ธ
$FEZ range = 54.20 - 59.30 โ™‰๏ธ

$DAX 23061 -1.15%
$FTSE 8600 +0.05%
$CAC 7685 -0.55%
$AEX 894 -0.25%
$IBEX 13495 -0.15%
$MIB 38348 -0.35%
$SMI 12225 -0.2%
$MOEX 2787 +1.75% โฌ…๏ธ๐Ÿช† Image
Read 11 tweets
Apr 7
Hello Melt Down Monday! ๐Ÿ’ฅ

The Liberation Day celebration continues with the old adage that "the selling will continue until morale improves."

Let's dig into the market ๐Ÿงฎ!
Asia absolutely pummeled ๐Ÿช“๐Ÿฉธ๐Ÿฉธ๐Ÿฉธ

$NIKK 31187 -7.7%
$SSEC 3097 -7.35%
$HSI 19828 -13.2% โฌ…๏ธ
$KOSPI 2328 -5.55%
$IDX closed

Australia ๐Ÿช“๐Ÿฉธ๐Ÿฉธ
$ASX 7343 -4.25%

Bharat ๐Ÿช“๐Ÿฉธ
$BSE 72573 -3.7%
Europe ๐Ÿช“๐Ÿฉธ๐Ÿฉธ with ranges being blown out to the downside

$VSTOXX 51.55 โฌ…๏ธ ๐Ÿ˜ฑ

$DAX range = 20167 - 23808 โ™‰๏ธโ“
$FEZ range = 49.21 - 58.37 โ™‰๏ธโ“

$DAX 19408 -6.25%
$FTSE 7686 -4.6%
$CAC 6842 -5.95%
$AEX 792 -5.8%
$IBEX 11686 -6.0%
$MIB 43408 -6.45%
$SMI 10989 -5.35%
$MOEX 2702 -2.85%
Read 11 tweets
Mar 4
Hello Trade War Tuesday!

$GOLD ๐Ÿ”บ
$VIX ๐Ÿ”บ
$TNX ๐Ÿ”ป
$USD ๐Ÿ”ป
$WTIC ๐Ÿ”ป
$DAX ๐Ÿ”ป
$BTC ๐Ÿ”ป

GDP ๐Ÿ”ป Inflation ๐Ÿ”ป = Deflation

Trump 2.0 making bonds great again

Let's dig into the market ๐Ÿงฎ! Image
Asia โฌ‡๏ธ โฌ†๏ธ as China exacts 15% agricultural tariff

$NIKK 37318 -1.35%
$SSEC 3324 +0.2% โฌ…๏ธ
$HSI 22942 -0.3%
$KOSPI 2529 -0.15%
$IDX 6373 -2.25% โฌ…๏ธ

Australia โ†˜๏ธ
$ASX 8198 -0.6%

Bharat โ†”๏ธ
$BSE 72993 -0.1%
Europe with the "sell!" โ†˜๏ธ

$VSTOXX 20.375 ๐Ÿ”ป

$DAX range = 22328 - 23451 โ™‰๏ธ
$FEZ range = 53.90 - 56.14 โ™‰๏ธ

$DAX 22724 -1.8% โฌ…๏ธ ๐Ÿ‡ฉ๐Ÿ‡ช
$FTSE 8843 -0.3%
$CAC 8109 -1.1%
$AEX 921 -0.95%
$IBEX 13164 -1.7%
$MIB 38361 -1.8% โฌ…๏ธ ๐Ÿ‡ฎ๐Ÿ‡น
$SMI 13105 -0.6%
$MOEX 3243 +3.1% โฌ…๏ธ ๐Ÿช†
Read 12 tweets
Feb 21
Hello OPEX Friday!

There's a lot going on

Feb index options expire at the open ๐ŸŒŠ

S&P Global PMIs rolling out ๐ŸŒ

Chinese ๐Ÿ‡จ๐Ÿ‡ณ indices ripped ๐Ÿ“ˆ

And, in the face of 4.0% ๐Ÿ‡ฏ๐Ÿ‡ตheadline inflation, the #BOJ threatens QEโ‰๏ธ

Let's dig into the market ๐Ÿงฎ!

Asia rallied into the w/e with ๐Ÿ‡ญ๐Ÿ‡ฐ ๐Ÿš€

$NIKK 38784 +0.3%
$SSEC 3379 +0.85%
$HSI 23478 +4.05% ๐Ÿ‡ญ๐Ÿ‡ฐ
$KOSPI 2655 unch
$IDX 6792 +0.05%

Australia โ†˜๏ธ
$ASX 8296 -0.3%

Bharat โ†˜๏ธ
$BSE 73511 -0.55%
Europe โ†”๏ธ on mixed PMIs with ๐Ÿ‡ฉ๐Ÿ‡ช ๐Ÿ—ณ๏ธ pending

$VSTOXX 16.85 ๐Ÿ”ป

$DAX range = 21951 - 22904 โ™‰๏ธ
$FEZ range = 53.07 - 55.46 โ™‰๏ธ

$DAX 23324 -0.05%
$FTSE 8677 +0.15%
$CAC 8155 +0.4%
$AEX 939 unch
$IBEX 12937 -0.3%
$MIB 38322 +0.2%
$SMI 12868 +0.5%
$MOEX 3304 +0.35%
Read 11 tweets
Jan 1
๐Ÿปโ™‰๏ธโ†—๏ธโ†˜๏ธโ†”๏ธโš ๏ธ๐Ÿšฉ๐Ÿ”บ๐Ÿ”ป๐Ÿงฎ ๐Ÿ’ฐ

2025 Global Macro Outlook

1/15 ย ๐Ÿงต

Here are the major factors in play as we head into the new year:

- Fed and Bond market at odds
- Bear steepener in play with 10Y3M de-inverting
- US inflation sticky with strong, above trend NGDP
- Employment weakening around the edges
- CBs around the world cutting (US likely on pause)
- Yen carry trade unwind round 2
- China stimulating
- Global conflicts increasing
- Trump presidency (tariffs, taxes, budget deficit, and debt ceiling)
- $USD Strength, elevated yields
$SPX and $BTC near ATHs (sentiment near giddy)

Letโ€™s break these down
2/15

The Fed and the Bond market have been at odds all year

Coming into 2024, Fed Funds Futures markets were pricing 6 to 7 rate cuts. The bond market responded by driving yields from 3.87% on 12/31/23 to 4.7% in four months while the Fed stood pat at 5.25-5.5% FFs

Then came the summer growth scare

The 10Y dropped to a low of 3.603 coming into the 9/18 Fed meeting. Spooked by the SAHM rule trigger, the Fed cut 50.

What did the bond market do?

Turned tail and rose to 4.5% in 2 months, fell back briefly to 4.125% in early December before rising to 4.64% last week, following the Fedโ€™s hawkish cut and likely pause.

I see this back and forth dynamic continuing with another growth scare coming in Q125. More Fed cuts to come after a January pause.Image
3/15

The consequence of Fed/Bond market interplay is the bear steepening of the yield curve

After more than a 2-year inversion, the 10Y3M curve de-inverted on 12/14/24

Previously recognized as the most accurate signal of a coming recession in the next 3-6 months, the 10Y3M curve has been written off as dead

I donโ€™t think itโ€™s dead, and we are likely to experience a contraction in 2025.Image
Read 15 tweets

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