GLOBAL MARKETS weekly recap wk4 1/n

• RiskON continued
• hope on FED total pause, PBoC, remain dovish ECB/BoJ
• 76%/24% indices breadth
• FX 81% vs USD, 71% vs JPY
• most of EM bonds rallied
• creditspreads tighter
• VIX lower

2/n 1MTH performance (basically since lows near x-mas)

• literally a one way street across asset classes... worst = cash

• technical oversold in Dec plus
• FED blinked
• ECB dovish
• PBoC dovish
• short cover fuels rally

3/n YTD

• strong start after bad 2018
• annualised velocity little chance to sustain

4/n Global Assets ROC overview

• Turkey (worst is priced in), Brazil (reform), Russia + Energy leading the pack

5/n Trend & Exhaustions

6/n Global Yields & Curves

• mostly bull-flattening last week

• US dropped to 15bp, Canada stayed at 9bp, Europe starts to shift now too with more flattening, Czech slightly wider to 17bp, Turkey still massively inverted after CBRT left rates unchg

7/n US Credit spreads

• RiskON continued, all sub sectors spreads tighter [possibly just a counter rally in the ongoing trend, so better watch these]

[ * inverted scale to mirror stock indices performance ]

8/n RiskOnOff ratios update

• majority continued RiskOn moves [ within the current downtrend ]

9/n European Corps & Financials

• ITRAXX indices Corp IG & HY as well as Financials Senior & Subordinated moved lower in RiskON mode too...

10/n CDX vs SPX update

• just a rebound... not a signal yet

11/n CDX vs SPX model

• visualised the Credit spread as a warning signal, SPX rebound after shock sell off, but not out of the woods yet

12/n VIX term structure

• RiskOn mode since x-mas , oversold situation and FED blinked led to a collapse in the front end, a sharp move from high uncertainty and backwardation inverted curve to currently near normal and contango. Market needed a break

13/n US DASHBOARD

• Global Macro was and is clearly deteriorating (EU,JP flash PMI worse, China <50, but US better)

• Technicals (outright & ratios) in downtrend, but in current positive momentum

• FF from +50bp hike,to 25bp cut to neutral now

• Rebound based on FED pause

14/n recap flash M.PMI last week

• Japan 29M low 50.0
• Eurozone 50M low 51.4
• Germany 50M low 49.9
• France comp 47.9
• US improved to 54.9

[...but the world especially EM needs a weaker US$ and stable US rates ]

15/n Global big4 Centralbanks BS

• no stimuli , no further rebound

• "hope is not a strategy"

16/n Global big4 2YR rates

• US "too fast too furious" led to a global dilemma

• EU/JP in a hole without zero ammunition...

17/n China - the big hope (again , like 2016 ?)

• they could pump up the balance sheet
• further reduce RR
• cut rates
• [ and hope this won't implode in their face one day ]

18/n ECO data last week in case you missed them ...

19/n quick word on Cable

• BREXIT deal got a massive rejection the other week which led to a relief rally

• as a matter of fact, short term yield differentials GB-US pointed all the way up and GBPUSD has caught up... +5% or so