Macro Edge – Trading Opportunities In Macro Markets
How are the macro winds blowing?
Macro Edge tells you what you need to know about macro developments in financial markets, together with our latest trading ideas.
Summarized and presented to you in charts!
The Macro Charts You Must Know #2
If the frame above isn’t loading, you can read Week In Charts over here.
The week in a nutshell:
- Another round of record CPI/PPI inflation readings has not produced price action that can be considered inflationary
- Markets are simply not buying into the inflation hysteria narrative
- On the contrary, they are beginning to price in lower growth!
- The US yield curve continues to flatten as yields on the long end keep falling
- Commodity prices are no longer strengthening across the board, with most off their highs, and lumber weakening considerably as COVID supply disruptions begin to work themselves out
- The USD continues to trade with a strengthening bias
Can red hot CPI data actually herald stagflation instead of #inflation?
— The Pensive Nugget (@pensivenugget) July 15, 2021
Here’s a look into why:https://t.co/4fOLR1AbAB pic.twitter.com/2qR0DqPlDt
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The Macro Charts You Must Know #1
If the frame above isn’t loading, you can read Week In Charts over here.
The week in a nutshell:
- More and more markets are moving in a manner that suggests a less inflationary outcome, even as economic data continues to come in strong
- A broadly stronger Dollar, together with falling yields and a flattening US yield curve are not signs of economic strength
- Rather, they signal tightening USD liquidity and a deteriorating growth outlook
- How these markets move in the coming weeks and months will give us a better idea of how disinflationary things will get
- Stagflation is also becoming increasingly likely, especially if commodity prices stay high due to supply constraints
- WTI will be more of an issue here than copper
Many think high oil prices = high #inflation = Fed must raise rates. Implicit is the assumption that demand is booming.
— The Pensive Nugget (@pensivenugget) July 6, 2021
But supply cuts are a major factor here. pic.twitter.com/NMmtsy9zC4
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