Some extracts :
- We’ll come back to these various points, but first, your scribe will recall his convictions in Global Macro even though the markets no longer have any rules:
- Duration is the main danger in asset allocation.
- Markets are increasingly ripe for a rebound in risky assets.
- Inflation of between 3% and 4% is a normal long-term regime.
- etc…
- As we all saw yesterday, bonds and the duration effect remain the main risk. The re-penetration of the US yield curve is only just beginning and, ultimately, this will be positive for the banking sector
- For the record, the famous “basis trade” allowed the contagion of the fall in Treasuries (and hence the rise in rates) and the fall in equity markets in 2020.
Your scribe is concerned about certain arbitrages artificially inflated by unconsidered leverage effects, particularly “mulistrat” funds…
- Liquidity: Our quantitative risk measures have evolved over the course of a day.
- While we eagerly await China’s PMI figures (released on Saturday), we do have some evidence of a Chinese rebound. We are fortunate enough to have regular discussions with ….
- According to a PBOC advisor quoted by Reuters, China is on track to achieve economic growth of just over 5% this year and has a relatively large amount of room to maneuver to sustain economic growth.
- Speaking of revisions and adjustment factors, the US Q2 GDP revision (published today) is the subject of debate, as in parallel, the BEA will also post its five-year GDP revision for the period Q1 2005 to Q1 2023.
