Markets are indicating that the world is in trouble. Exit, hedge, or position yourself to profit, as long as you’re listening to what markets are screaming.
US breakevens have joined the stronger USD, inverting US yield curve, and falling base metals in signaling trouble ahead for the global economy.
The bounce is over & problems grow by the day. USD is stronger, the yield curve is re-inverting, EU debt troubles mounting, and high prices are choking growth.
Macro markets have ceased moving in tandem, but the global macro backdrop remains challenging. How long can markets keep this up before moving in tandem again?
US yields aren’t pushing higher anymore, regardless of the Fed’s hikes, or crazy inflation. If US yields keep falling, global markets are in for more chaos.
Risk assets managed a small rally, but they turned again yesterday. USD is marching higher, as more markets show that something is wrong in the global economy.
Risk assets beware! Global USD shortages have begun, signaling a turn in the global economic cycle. Stagflation, if not outright deflation, is now likely.