Macro Research

The Great Rotation

When market themes change, they can be very subtle from one sector to the other. For example, tech to oil short term bonds to long term or from one region to another. A few of these types of changes happened over the last couple of months I think are worth exploring.   The last decade…

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Macro Research

Tech Wreck 2.0

It’s quite clear certain parts of the market such as crypto, saas and other duration linked assets in Tech has recently had a fall from grace reminiscent of the .com bust. How deep this goes will depend purely on central bank policy, of which I’ve tried to argue a fall in risk assets is actually…

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Macro Research

After Inversion Comes?

In my first note, I asked the question, will the yield curve invert? With 5s30s and more importantly the 2s10s inverting on 31/03/22, the guessing game is over! The inversion although an important part to start a countdown on a risk off set up. It’s a steepening of the yield curve that comes after an…

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Macro Research

The First Warning Signs

The bond market and in particular certain yield curves are starting to flash warning signs: 5s-30s inverted this week for the first time since 2006. This information is useful and not so useful depending on your time horizon. Let’s answer why it’s useful first, it’s telling you in simple terms that growth will slow, and…

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Macro Research

Don’t Fight the Fed

The phrase “Don’t fight the Fed” is normally attributed to the reaction function of central banks once a crisis is underway. What does it mean? Simply put, once risk assets have been sold off, normally the Fed would step in and buy bond, i.e., quantitative easing plus cut interest rates, this would provide liquidity therefore…

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Macro Research

Will The Fed Hike in March?

With the war between Russia and Ukraine dominating headlines inflation numbers not seen since the early 80s and what could be the first Fed rate hike this month. I want to break down how different Fed speakers are looking at how much to hike by.   At a very basic level we can say that…

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Macro Research

Is The Yield Curve About to Invert?

Since Q4 of 2021 to today we have had wild swings within fixed income markets. As G10 central banks have taken notice of rising inflation and bit by bit have had to drop the “transitory inflation” line. This has led to the front end (2 Year yields) rising dramatically and pricing in a more hawkish…

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