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Kai
, 22 tweets, 11 min read Read on Twitter
MT GLOBAL MARKETS Weekly recap wk17 26Apr19 - PFLUGPOST late thread 1/n

• another US RiskOn week, 4th month since FED "put", no sign of roll-over
• VIX/VSTOXX remain suppressed
• global stocks mixed/neg
• more US$ strength will be EM concern
• this wk ESI/PMI/ISM/FOMC
2/n update Global Markets 1M performance

• yet another strong RiskOn month, combined with seasonal factors and FED "certainty" to put rates on hold/ stop QT (more to this subject later)
3/n update Global Markets YTD

• strong sell-off Q4 2018 > FED put > strong rebound 2019, but major benchmark indices annualised YTD not sustainable, I said that a few times. It will slow down and a correction is overdue
4/n update Global Markets wk/mth/YTD/YoY overview across segments
5/n update Global Markets Momentum / Trends / possible exhaustion

• many segments still got good momentum and good trends. picking tops is not a strategy.

• I included US&EU credit benchmark spreads, they too show no signs of rolling over

• also, I added new 52wk high/low
6/n moving to yields section = update 10Y global govt benchmarks heatmap

• DM with another bond rally, South Europe "Club Med" ex Italy made new yield lows on weekly basis close

• AU new 52wk low as CPI+PPI came weaker than exp

• Turkey remains in trouble (FX res/US$/Oil)
7/n update global govt 2Y/10Y/yldcurve overview ...
8/n overview 2Y, 10Y yields/Rating

• this is a good reflection of how most DM centralbanks "destroyed" price and risk discovery with their QE programs.... but since you can't fight CB, better use these info and tools to connect some other dots

• IT/ES/PT wouldn't "trade"there
9/n talking about CB QE... not sure if this is new or I overlooked the attachments in last weeks Apr minutes, but did the BoJ RELAX and EXPAND
their collateral eligibility standards ?

boj.or.jp/en/mopo/mpmdec…
10/n further with CB thoughts: FOMC this week

• of course they will not change anything on the rates side, and they already announced stop QT later this year. (or will they really start buying UST again in QE4?)

• down the road, the market is pricing in a rate CUT. why ?
11/n FOMC vs "Mr Market"

• FOMC verbally intervened in Dec/Jan, then changed their "official" slope in March...

• FF Futures reflecting a very different opinion about that.

• Q1 GDP came stronger than expected, this could create a dilemma for FED now, although no inflation
12/n here is US GDP (came stronger than expected) vs ISM (update this week, so let's see what the business leaders actually see in their orderbooks)
13/n update US swap curves

• 5s30s keeps steepening and if I am correct and this implies what it supposed to do, there will be trouble within the next 12M and FED will change from neutral pause (now) to indeed cut, because the market is pricing in a recession ?
14/n anyways... for the time being, credit spreads don't show immediate concerns (as explained earlier with the Momentum/Trend view)
15/n almost every US or EU credit spread in any sector looks like this.

• regardless of CDS / indices, benchmark or ASW spreads, this is one of <the> key indicators most perma-bears ignore. You can't ignore FED stance, nor Credit Risk gauges, nor other technicals
16/n and with "the other technicals" I mean real market breadth...e.g. NYA advance/decline, new high/new low ... same as credit spreads didn't roll over, nor did these indicators. Picking tops is not a strategy.
17/n what everyone is now talking about... complacency in implied stock vola VIX or VSTOXX

• in fact, Europe is even more complacent than US

• CFTC COT report showed massive VIX shorts

• 2s10s yldcurve fwd suggests a possible reverse and higher impl vola starting in July
18/n meanwhile, VIX term structure remains very steep in contango, and 4months monster rally and seasonality in SPX, DAX, CAC suggests RiskReward for the next 1-3months is skewed towards correction
19/n Germany IFO last week didn't really improve sentiment ...

• Current 103.3
• Sentiment 99.2
• Expectations 95.2

all weaker than expected and slower than last reading

• Y/Y basis small rebound, DAX follows (besides SPX correlation)

• bigger picture tho, GDP down
20/n update bigger picture US MRI "model"

• flash UoM weaker
• credits tighter
• VIX suppressed

this week PMI/ISM/NMI for further business view.

• Stock market is not the economy.
• Surveys need to be confirmed by hard data.
• FED consensus vs FF futures ?
21/end that's all folks for now

have a great week ;-)
now, @threadreaderapp please unroll , thx !
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