Rates: You better be following rates right now ( and most of the time!) to get your direction for equities. We have been in a hyper rate sensitive period with outsized moves coming effectively with no data or CB activity to support.
The market is leading…This morning Greece again is fodder for folks to say yields should suffer but to be clear, this is a credit event, not a rates move. The last three weeks of yields moving higher is a rates adjustment. The 2.15 may be the new support line in 10yr US yields judging by the price action. A small ratchet higher ( which we have seen) ins consistent with the view that inflation is slightly higher and normalization is slowly happening.
10yr spreads between US and Germany have bounced a bit today but clearly are trending lower and should be, led by Europe.
Target 1.30 or basically where people felt we should have gone after ECB QE bazooka but actually went the other way.
0.50 - 0.60% on the 10yr Bund is the new range to hold…
Yes, Greece causing some credit angst yet again in Europe. Spain and Italy seeing pressure on the 10yr
Meanwhile hope you didn’t cover that Euro short! Where the %*#! Did all the Dollar bulls go recently??
CFTC DATA SHOWS THAT DOLLAR LONGS FELL LAST WEEK FOR THE SEVENTH STRAIGHT WEEK AND THE LOWEST LEVEL IN 9MONTHS. Time to get long…
Amazing how consensus quickly evaporated (along with the short oil call)…The last three days have seen 93.00 hold on the DXY a key 6m level….
… stay short the Euro to 1.065-1.075 area on this current move
We said last week to take profits in commodity currencies…Aussie moving lower watch break of .7900
Gold may have seen a breakout move last week.
We are staying long Gold miners this week over global miners but are not abandoning a view that global miners are in an uptrend. Dollar strength will be a test of your resolve…
Clearly on the first brush, EM doesn’t like the stronger Dollar but we believe this is part of the long term solution to EM putting a stake in the ground and moving past the last four years of underperformance to SPX…some of it extreme.
Turkey continues to outperform….
So does $PBR after earnings…
…While Brazil toppy?
“Most Valuable Currency”? …AMAZING RUN FOR THE RUBLE