Yesterday's moves across equities and bonds were another stark reminder that bonds can no longer help offset larger declines in equities. Only long volatility components make sense as long as yields are low.Much has been written already about the death of the 60/40 portfolio and we have also talked about...
FX Update: USD and JPY jump again on market turbulence
The wider market turbulence boosted the USD and especially the JPY as USDJPY eyes the big 104.00 level this morning and many other JPY crosses have broken down. Is this a positioning clear-out of a nervous market unable to sustain a position ahead of the big US election unknowns? Hard...
Podcast: Vol strategies when bonds fail to act as safe havens in this turbulent market.
Today we look at yesterday's ugly deleveraging move in Europe and the US on the new Covid-19 lockdowns and point out how "safe haven" bonds are not providing any offsetting safe haven premium and where traders might look for long volatility strategies for protection. Also a look into the FX,...
Market Quick Take – October 29, 2020
Equity markets took an ugly beating yesterday as major European countries announced draconian new lockdown measures. Asia ex China responded in kind. The US dollar and Japanese yen rallied hard in response to weak sentiment, while precious metals and oil fell sharply. After the US session today, Apple, Amazon, Alphabet...
Macro Dragon: Trading a Trump Victory… Part One of Trading the US Elections
Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime. (These are solely the views & opinions of KVP, & do not constitute any trade or...
Election fears meet fresh lockdowns
Equities continued their slide overnight, with COVID fears and fresh lockdowns weighing, the US fiscal deal dead and the election drawing close. An ugly session for risk assets as the focus has firmly shifted toward de-risking ahead of the US election and what could be a volatile period for markets....
US Election Countdown: T-minus six days – Scenarios and market reaction.
In the US election countdown piece, we look at five different scenarios for the US election, for everything from a very unlikely Trump win to the most extreme Blue Tsunami scenario for the Democrats. For each scenario we take a stab at how the US dollar and major asset classes...
Earnings sunshine, VIX curve backwardation and bleeding Europe
Earnings releases continue to shine against expectations but the good news is drowning in all the bad news related to surging Covid-19 cases, still no breakthrough in US fiscal talks and the looming US election with a potentially unpredictable outcome.Earnings releases continue to be strong across the board with 83%...
FX Update: JPY is making its move, key trigger levels approaching in the crosses
The mounting Covid-19 toll and perhaps concerns of a the rising uncertainty on whether the Democrats can achieve a full Blue Wave outcome have risk sentiment on edge. US long yields have backed down aggressively and this has helped the JPY rise to the top of the pack, with big...
Lockdowns and Helicopter Money
While France is expected to be the next EU country to announce a national lockdown to combat coronavirus pandemic tonight, pressure is significantly mounting on central banks to take further steps to support aggregate demand and fight against deflationary forces resulting from the COVID-19. Once unimaginable, central banks are increasingly...