Prepare for another intense week ahead. European sovereigns are selling off as the market digest news that the Hungarian central Banks may hike the benchmark rate next month. Italian BTPS lead losses as the market fears that the ECB will taper PEPP purchases in June. Under the PEPP Program, Italian...
Equities look expensive, but are they?
US equities are valued at rather high equity valuations compared to history, but are they expensive when they are compared to bonds?Almost 11 years as a professional in this industry has taught me that most investors rarely think their arguments to the end and apply statistics in a questionable way....
COT: Speculators sell into overheated commodity market
Futures positions and changes made by hedge funds across commodities, forex, bonds and stock indices up until last Tuesday, May 11. A week where renewed inflation fears ahead of U.S. CPI pushed the S&P 500 to a one-month low, the dollar lower and US 10-year breakeven yields to a fresh...
Podcast: Uncomfortable correlations
Today we look at the high degree of correlation between US equities and US treasuries and why this is cause for discomfort, note recent surges in inflation readings and inflation expectations as a sign of an inflationary cycle igniting. We also discuss weakness, however, in major commodities since mid-last week,...
Market Quick Take – May 17, 2021
Summary: US equities closed last week atop a very sharp two-day comeback after a prior steep sell-off, with the mood in Asia mixed to start the week as Taiwan and Japan struggled, while mainland Chinese shares rallied sharply again after avoiding several attempts at breaking down through key support last...
Macro Dragon WK #21: Inflation Divergence, Central Banks vs. Markets?
Macro Dragon = Cross-Asset Quasi-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...
From reflation to stagflation, how to position?
Identifying risks and opportunities is crucial amid a fast-changing market. We believe that it has arrived the time to weigh in on the threat from stagflation. In this analysis, we look at what that means for one's portfolio and which assets can help investors navigate these markets.Did you know that...
FX Update: USD downtrend looking for fresh fuel, or else.
The markets have pressed the pause button on the recent USD sell-off, as rising long US yields and rocky risk sentiment have offered some support and fundamental support for the move via widening yield spreads and other factors is not particularly in evidence. With the US CPI up today and...
Crude oil looking beyond short-term challenges
Crude oil and natural gas have both for different reasons been lagging some of the blistering pace of other commodities this past week. While several key raw materials from copper and iron ore to corn and palm oil have reached record or multi-year highs, the oil market has been focusing...
The second collapse of green vs traditional energy
The green transformation has had troublesome year compared to 2020 down 45% relative to oil and gas majors which have enjoyed a strong rebound in market value due to rapidly rising oil prices since early November last year.Risk came back in many speculative equity pockets yesterday on a higher volume...