“It’s vital, therefore, to remind yourself that these moves, while portrayed as dramatic, represent only the very tip of the iceberg of positions built up over a very long period of time and in massive size.”
“This risk aversion was driven by political noise and speculation. That just doesn’t provide sufficient calorie intake for bears. This isn’t to say that we can’t get a fundamentally negative development in the days ahead, but unless we do, expect the bears to be back in hibernation by the weekend.”
Needless to say, geopolitical risk should be “top of mind” for anyone who fancies themselves a serious
Prepare for another round of “reflation trade” excitement…
The worst story ever told.
“There are a couple of ways in which these disconnects can be resolved. But until they are, global central banks need to tread warily. One resolution is of course equities retreat and yields decline, recognizing the dearth of liquidity. “
“The market is way too cavalier about this weekend’s election. In modern history, there has never been a French election without one of the two main parties being in the second round. This is unprecedented. If someone tells you they know how the French electorate will behave, they are deluding themselves.”
“That’s right! We can’t have anyone freak out out there, ok?”
“The bad news is that medium-term recession risk is now rising.”
“The hardest trades are often right ones. I am not sure if it is brave or stupid (and probably a bit of both), but I am going to be buying silver down here.”
“Iron ore demand is waning, which, against backdrop of near-record/record inventories and aggressive Chinese and seaborne supply, paints a nightmarish picture”…
Ok, let’s see… It’s Tuesday and there’s some European PMI data you should note. Because
“Yet too many investors mistakenly believe good old fashioned fundamentals still drive financial asset markets. Nothing could be further from the truth. Since the 2008 credit crisis, Central Bank flows have made a mockery of financial pricing theory.”
Ok, so as detailed earlier this morning, the first thing you should note about the
“It doesn’t really matter. For a while, investors will assume the rot spreads deeper than just one company. The entire Canadian real estate sector will now be guilty until proven innocent.”
“It’ll just be a matter of how long it takes to work out which part of Trump’s proposal will justify that move after the fact.”
“Despite the 16 weeks of inflows into EM debt, positioning is not that extreme, as investors have been reducing risk in last few days ahead of binary events. Market participants agree that valuations are stretched but carry seems to be the only game in town.”
“It’s tough for me to put this down on paper, but really, the proper bet is to assume Yardeni’s model will once again prove correct, and buy stocks.”
“There is precious little room for everyone in the gold boat. This is made all too clear with the problems we quickly experienced from a little interest in GDXJ. Can you imagine what will happen if the tide truly turns?”
It was a sharp move lower in iron ore that weighed on risk sentiment overnight as futures dropped 3.7%, following a nearly 2% move lower on Monday.
“Hyped tail risks keep failing to materialize as we overcome multiple hurdles.”
Well, I’m by no means sure that anyone cares on a lazy, post-holiday-weekend Monday, but
“This is how far we want prices to rise. That is our aim.”
“Will the survey macroeconomic data turn into strong hard macroeconomic data; will the Chinese credit data turn into real physical demand for metals; and will the OPEC production cuts turn into solid US oil inventory draws? “
Well, it kinda feels like everyone just said fuck it and bought the yen overnight
“Typically, traders have a pretty strong opinion of how they think things currently stand and then try to craft a narrative of where they believe asset prices may be going. In today’s environment, investors seem to have more confidence in their longer-term outlook than on what is going on now.”
We’ve been saying since January that investors were showing signs of fading the reflation narrative
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