Our portfolio is green and we are content with the returns despite a few bad apples in the mix. The market environment is uncertain, and we anticipate increased selling pressure is imminent once the tightening gets going. Risk management and diversification are crucial in this setup. See our weekly performance evaluation for here details
Something for your Espresso: The bumpy road to a slowdown
As we approach the June rate decision, markets cannot find a solid footing. But neither can the FED. The stakes are high and opinions are split among decision-makers
EM by EM #7 Is Turkey to TRY a pivot?
As the Lira is trying to outcompete the depreciation of the Venezuelan Bolivar and the volatility of dogecoin, we provide our view and assessment of the near-term impact of Erdogan’s narrow victory. Markets were not impressed by the outcome but will the skepticism remain the prevailing narrative?
Portfolio Watch #1 – Not your rookie market
As we close out our first week with a live portfolio, we are excited to introduce our new weekly watch piece, providing a comprehensive summary of our trading week. Every Friday, we will release this publication, and we extend a warm welcome to you all in this premiere edition!
EM by EM #6 – is Brazil still attractive?
Having commenced this series with a bullish perspective on Brazil, it has now been approximately two months since my initial analysis. As I reassess the situation, I contemplate whether the trade is losing momentum or if there are still untapped profits to be seized.
EM by EM #5 Stairs up and elevator down in China?
As the markets evolve, we adapt accordingly. Although the reopening of China’s economy is still ongoing, the optimism surrounding it is gradually diminishing. Simultaneously, the worsening economic data from Western countries indicate a significant slowdown. With the once-promising light at the end of the tunnel slowly fading away so do the flows. In this short piece we reveal our new position
Out of the box #3 – Italian banks the first domino?
While everyone is looking at Europe for safety we are taking the other side of the trade. The unbalances of the Eurozone haven’t gone away and with inflation & dark clouds on the horizon, we question whether an indebted fragmented economy can hold fast as the economic winds turn unfavorable. Lagarde is running out of bullets and fiscal ammunition is in short supply
China Watch – How’s it going with that reopening?
The China play has thus far not been profitable but I refuse to back down on my underlining analysis- Yet some reconsiderations are in order and it might be the start of a larger reevaluation. But for now the course of the ship is intact
Something for your Espresso: Gradually then suddenly: labour, inflation and banks
To quote Hemmingway: Gradually then suddenly. That goes both for Silicon Valley bank’s infamous deposit base and the transition of monetary policy into the real economy. Is the peak in? Not in pain
EM by EM #4 – Argentina and the real de-dollarisation
In recent weeks, social media and leading financial media have been flooded with sensational articles about the dollar’s demise. In this piece, I will provide an analysis of the actual immediate obstacles facing the American dollar where USD hegemony is being undermined. Given the current US debt ceiling theater, one can scarcely think of a better point of reference than the debt default champion of the Western hemisphere: Argentina
Positioning Watch: Gimme shelther
Now that the ECB and Fed meetings have concluded, we can assess how traders have positioned themselves after the curtains have closed
Something for the Espresso: More hiccups or will JPOW & Lagarde sleep tight?
We suspect both Powell and Lagarde to be content with today’s releases but perhaps the cycle fools everyone again?
Out of the box #2: Back to austerity. Euro sovereign crisis vol 2?
The hardships brought about by Covid and the Ukraine war initially fostered political unity across Europe. In this article however, I will argue that fragmentation may soon regain prominence as liquidity diminishes, labor markets weaken, and governments face the need to implement tighter fiscal policies. These circumstances create a fertile ground for the resurgence of the zero-sum debtor/creditor conflict that characterized the 2010s.
EM by EM #3 – Copper comeback?
In Q1, we had a long position in copper. However, since our exit, industrial metals have experienced a reversal, and most of the gains YTD have been wiped out. But could the copper story have another leg to it? In this piece, we will share our perspective combining the macro with the development from the relevant EM frontlines.
Positioning Watch – Gold party still on
Cheers to the weekend everyone! And welcome back to your Positioning Watch series. The data is now up to speed again and you can always find ALL positioning data readily available in our datahub. We will highlight the most important conclusions weekly in this series. Equity positioning: Nasdaq positioning remains LONG – Nasdaq keeps up steam from the easter – Overall equity positioning remains short but the sentiment is not overly bearish across styles/s While the recent liquidity injection has offered tailwinds to equities we suspect fundamentals won’t justify the valuations as the sugar rush reverses. We could still see some optimism play out, but overall our long beta is running on fumes and thus trimmed down a tad FX Positioning: JPY is still unpopular – JPY positioning keeps bearish overall but a tad less than during easter – The EUR bet is still very consensusy, while BRL bullishness has lost a bit of steam – The USD positioning is long and BRL is slowly losing its favour among speculators We remain positive on BRL which seems cheap and offers good real rates in a world starving for inflation- safety. Suffice to say price action has yet to follow suit Commodity Positioning: Gold party is still on – Gold positioning may look stretched and plenty of profits could be ripe for taking. But positioning remains long for now – Energy still hasn’t got the recession memo On the surface, it may look as if oil is simply proxying expectations of […]
Something for the Espresso: PMIs to sum up the week
After a job claims report that was only slightly weaker than the consensus yesterday, our focus now shifts to the upcoming release of the PMI reports toda
EM by EM #2 – Don’t fight the Xi
Following the publication of my EM by EM debut piece, where I highlighted the attractive set-up for Brazilian sovereigns (which thus far have fared well), we now shift our focus across the Pacific to Beijing.
Something for your Espresso: Don’t count on Britain leading the neighbours into the abyss
After a shocking CPI report from the UK, one may ponder whether British exceptionalism carries the day or whether we have more price pain in store for the continent. We hold our ground and remain in the “CPI is deaccelerating fast” camp
Inflation Watch: Any last gasping from the “Inflation zombie” in the cards?
This week’s CPI report aligned seamlessly with our expectations, affirming the anticipated cycle-pattern. Naturally, this begs the question – what lies ahead, and what could break our view? Some additional thoughts for the weekend.
Inflation Watch: Why inflation is not in the grave but a dead man walking
Peak inflation is in, but monetary policy works with “long and variable lags” as monetarists say. While Goods inflation is sliding, some areas are resilient and services inflation remains an issue. Even though expectations and soft data are perplexing, there are pockets of data indicating a fight-back to the weakening dove sentiment.
EM by EM #1 – Time to buy Brazilian sovereigns?
While the global macro wheel is heading for a slowdown, could Lula prove to be the least anticipated fiscal hawk given the current state of affairs?
Rewind the Clock – Back to the 80’s ?
Economic stability coupled with low rates and lack of effective regulation have led minor banks to take considerable risks chasing profits. Now the chickens are coming home to roost- and we have seen it before.