The cyclical rotation is slowly but surely rolling and if central banks add rate cuts to this mix, we are staring directly into the melt up.

Welcome to our weekly Portfolio Watch, where we assess the tradeable themes and discuss our portfolio composition. In this revamped version of the series, we will touch upon the developments in our Macro Alpha Portfolio and our Digital Assets Portfolio.

In 1-2 weeks, we will launch our quant portfolio as well. Stay tuned. 

Macro Portfolio: Tilting cyclical
The macro environment remains positive and our cyclical rotation of the portfolio is off to a solid start. The consensus has moved swiftly in the direction of repricing the cyclical macro outlook of the US economy, but so far nothing is happening in the consensus expectations for Germany and China as a few examples of the macro momentum outside of the US.

The value and risk/reward is probably improving in bets that are positively correlated to a repricing of the outlook in industrialized nations outside of the US now, which entails a procyclical tilt associated with a weaker USD broadly. If big central banks add rate cuts to this brewing procyclical mix, we may be in for a global, and not local, melt up.  

Chart 1: No move in German and Chinese expectations while the US is to the moon