Living in the UK and working in the financial sector, it feels like it's all Brexit and Trump at the moment, interspersed with some economic data and a bit of central bank action. Although the…
Our Base Case Scenario
Our base case scenario remains unchanged. We think that the post Global Financial Crisis economic recovery is now in the late cycle stage. The US is the most mature, and naturally the Federal Reserve is…
Credit Market Wobbles Setup Potential Equity Market Test
After over a year without a more than 3% correction in the S&P 500, surely it is a matter of time before something wobbles and equity markets react. To be fair, the market has had…
A Patchy Dollar Breakout
For the time being, we are struggling to find much to say about equity markets. Generically, they just go up. They go up when bond yields decline; they go up when bond yields rise. They…
Thoughts Ahead of the ECB
By this time next week, we will know the outcome of the deliberations of the European Central Bank. The majority of forecasters expect an announcement on their QE programme, with a EUR20 billion or EUR30…
“Central Bankers Face a Crisis of Confidence as Models Fail”
The title of this week’s commentary is the title of an FT article published at the end of last week as monetary authorities gather in Washington for the annual meetings of the IMF and World…
Big Picture Thoughts as we Head into Q4
Throughout most of the third quarter, it feels like we have been almost obsessively focused on calling a turn higher in both developed market bond yields and the US Dollar. After what feels like forever,…
Some Thoughts on Inflation, Tax Reform and the Fed
Before this week’s report, we wanted to draw your attention to the trade ideas section of the report we have run for the past few weeks. For administration and regulatory reasons, we would like all…
The ETF Vortex
From time to time, we have mentioned ETFs in our weekly commentaries. On the surface, they are one of the most sensible investment choices that an investor can make, aren’t they? In an era in…
The Return of the “Unreliable Boyfriend” and Other Central Bankers
Stanley Druckenmiller is one of the greatest investors/traders of the last 40 or so years. He managed money for George Soros from 1988 to 2000, and was instrumental in the trade that broke the Bank…
Deciphering the Message from the Bond Markets
This week’s report is a little shorter than usual due to both non work commitments and also a sense that our market views are slightly out of synch with what is actually happening. This occurs…
Pulling the Trigger on the Bullish Dollar Trade
It was quite a busy week with plenty of news flow, but also some very interesting price moves which have our attention. We have discussed the US Dollar a few times in recent weeks, and…
It’s About Time That Markets Made Their Mind Up
The last few weeks have been frustrating as our core trades have struggled to make any real progress. Equity markets remain stuck in quite a tight range, as have core bond yields. When price moves…
Erratic Price Action Within a Period of Change
With summer vacations at their height, perhaps it is to be expected that price movements could become a little erratic. Political, economic and central bank headlines seemed to come thick and fast with price action…
The US Equity Bull Market Was Damaged Last Week. Perhaps Gold is a Partial Remedy
The action in equity markets this past week suggests that some serious damage has been inflicted on the bullish trend. Is the damage serious enough to mortally wound the bull? It is far too early…
From Low Volatility to No Volatility
Just when we thought that it couldn’t get any worse for traders, markets have almost come to a standstill. Simply put, unless price actually moves, traders cannot make any money. And so it is with…
A Mini Wake up Call as we Head into Summer?
Having been far too one directional with exceptionally low volatility in recent weeks, it feels like financial markets received a slight jolt last week just as many will be heading off for summer vacations. Nothing…
Fundamentals Versus Market Analysis
With central bankers preparing for their summer vacations, markets have been hanging onto their every word and nuanced syllable for guidance of what they may deliver in the Autumn. There was a mixed response to…
A Rare Opportunity in Soft Commodities
From time to time, we show charts drawn from the Commitment of Traders report to show when speculators (hedge funds and CTAs) are holding extreme positions, either long of short, of say a fixed income…