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…
5 Months of Nothing
Last week felt very quiet to us; perhaps not surprisingly so with 4th July celebrations in the US, the sporting calendar in the UK and Europe and people thinking about heading off to the beach…
A Tired Dollar May Give Risk Assets a Breather
Back on 22nd April, we said that we thought the US Dollar was on the cusp of an important move, and that it was time to sit up and pay attention. Since that time, the…
Not So Bearish on US Fixed Income
The market has been pretty bearish on US bonds for some time now, a crowd that we have been firmly sat in. The bear case is clear; not only are major buyers on strike, some…
A Small Note of Caution on Our Bullish Dollar Thesis
Last week, we laid out clearly our thoughts on the potential for a Dollar rally; and it's nice to get something right, as the Dollar either broke out or extended gains against all major and…
Battle Lines Are Being Drawn
We have regularly discussed our multi-month topping thesis in the last three months (and a few times last year – prematurely as it turned out), and price action in recent weeks has done nothing to…
Some Charts That Are Catching Our Eye
We thought we would have a look at a few charts this week that are catching our eye or have piqued our interest. So, less words this week and more pictures; which should make it…
Worst week for US stocks since January 2016 – part of the anatomy of a topping process
The US equity market suffered its worst weekly performance since the China inspired sell-off into January 2016, falling by about 6% over the five days. Although the focus may well have been on Facebook and…
The Big Waiting Game on the US Economy
It feels very much like a big waiting game at the moment. Economically the consensus became very excited about synchronised global growth as 2017 ended, and of course the US tax cuts were supposed to…
Another Goldilocks Employment Report
Just when equity markets needed an extra boost, the US released yet another “Goldilocks” employment report. Strong jobs growth surely indicates a strong economy; great news for corporate profits that are being turbo-charged by the…
Risk of Policy Error Clearly Rising – Some Key Charts and Index Levels
What a difference a few weeks make. At the end of January, financial markets were melting up, commentators were salivating over the US tax cuts within an environment of global synchronised economic growth. Investors of…
Signs of Short Term Improvement in Bond Markets
Having raised the specter of higher bond yields in recent months, we think that the market is showing signs that there may be some short term reprieve. If correct, and having said several times in…
Surely Not Straight Up Again?
Equity markets, having reached short term oversold levels that even we identified last week, have rallied very smartly in the last week or so. This rally is very similar to other V-shaped rallies we have…
Consider Last Week’s Correction a Clear Warning
We suspect that most experienced investors fully expected a correction in equity markets at some point (markets don’t go up in a straight line forever), however the ferocity and damage caused by the recent sell…
Equity Markets Finally Noticing the Price Action in Bond and FX Markets
We have been highlighting, for a number of weeks, the prospect of higher bond yields and suggesting that equities should eventually adjust to the downside in such an outcome. And for weeks, we looked like…
The End of the Dollar Standard Would be a Big Deal
We’ve all seen charts similar to the chart below, showing US bond yields, and the extraordinarily orderly decline in yields over the last 30 years or so. On the chart, we have marked the trend…
The Dollar May Be Down But Is It Out?
So far in 2018 we have tried to be fairly flexible with our thinking on the US Dollar. Fundamentally, we could quite easily build a bullish case as much as we could build a bearish…
Watch the Bond Markets as Pivotal Areas are Being Tested
Some key levels are definitely in sight for the bond markets. We will have to just wait patiently to see whether yields break out on the upside (which of course means bond prices going lower),…
Is it time for patient investors to increase commodity exposure?
Let’s start with a bullish thought to begin 2018. We, among others, have recently been pointing to the potential for higher inflation in 2018. To be clear, we are not calling for a massive shift…