Macro Regime Tracker: Bitcoin and Macro Flows
Macro regime and risk assets qualified clear
The Macro Regime Tracker offers a daily lens on how shifts in growth, inflation, and liquidity affect short-term risk and reward. Leveraging machine learning, AI, and cross-asset data, it identifies macro changes and their impact on market positioning.
Macro Regime Tracker Index:
I took an extended period of time in the livestream today explaining how to think about the macro picture, equities, gold, Bitcoin, and bonds. This video brings everything together:
The Bitcoin report I referenced in the video is here:
And Friday will be the last day to lock in the lower rate for the Substack before the price increase. I will be publishing some important pieces for paid subscribers tomorrow as well, so be on the lookout for this.
As always, all the systematic models and strategies are updated below. Thanks.
Main Developments In Macro
U.S. Macro, Policy & Banking
KASHKARI: DEMAND FOR LABOR SEEMS LIKE IT’S SOFTENED A BIT
FED’S KASHKARI: TARIFF IMPACT IS TAKING LONGER THAN I’D GUESSED
FED’S MIRAN SAYS NO MATERIAL SIGNS OF GROWTH DRAG FROM TARIFFS
FED’S MIRAN SAYS NOT FOCUSED ON ASSET PRICE BOOM: REUTERS
MIRAN: 25 BPS CUTS IS MAKING ADJUSTMENT SLOWER THAN NEEDS TO BE
MIRAN: LONGER POLICY STAYS RESTRICTIVE, GREATER THE DOWNSIDE
FED GOVERNOR STEPHEN MIRAN SPEAKS AT EVENT IN WASHINGTON
FED’S MIRAN: ECONOMY IS IN PRETTY GOOD PLACE, BUT HAS NEW RISKS
WALLER: FED’S BASIC STRUCTURE HAS SERVED THE COUNTRY WELL
WALLER: STABLE FISCAL POLICY BEST WAY TO KEEP YIELDS DOWN
WALLER: POLICY MORE RESTRICTIVE FOR SOME GROUPS THAN OTHERS
WALLER: WE’D BE ‘HURTING’ IF NOT FOR DECLINE IN LABOR SUPPLY
FED GOVERNOR CHRISTOPHER WALLER COMMENTS IN Q&A
FED’S WALLER SAYS IMMIGR. SHIFT MASKING DROP IN LABOR DEMAND
FED’S WALLER REPEATS HE FAVORS QUARTER-POINT OCTOBER RATE CUT
WALLER: RATE OUTLOOK AFTER OCTOBER DEPENDENT ON LABOR MARKET
FED SAYS LENDERS SHOULD BE RESILIENT TO A RANGE OF FACTORS
FED TO RELEASE NEW STRESS TEST PLANS FOR BIG BANKS THIS MONTH
US BANK RESERVES RESUME DECLINE, FALL BACK BELOW $3 TRILLION
US OCT. 2025 HOMEBUILDER INDEX AT 37; HIGHEST SINCE APRIL
U.S. Trade/Tariffs & Industrial Policy
US ANNOUNCEMENT ON AUTOS TARIFF RELIEF MAY COME SOON AS FRIDAY
COMMERCE DEPT SET TO EASE CAR PARTS TARIFFS ON US AUTO INDUSTRY
US NEARS TARIFF RELIEF FOR AUTO INDUSTRY: PEOPLE FAMILIAR
Europe (Macro/Central Banks)
ECB’S SCICLUNA: WE WILL HAVE MUCH MORE DATA IN DECEMBER
ECB’S SCICLUNA SAYS PRICE EFFECTS OF US TARIFFS STILL UNCLEAR
ECB’S SCICLUNA: WOULD NEED TO BE CONVINCED ON ANOTHER CUT
ECB’S NAGEL: NOT SO CONCERNED ABOUT INFLATION UNDERSHOOT
ECB GOVERNING COUNCIL MEMBER NAGEL SPEAKS ON BLOOMBERG TV
ECB’S NAGEL: FOR THE MOMENT `IT’S GOOD WHERE WE ARE’
WUNSCH: ECB ESSENTIALLY IN A GOOD PLACE
WUNSCH: RISKS A BIT MORE ON DOWNSIDE FOR INFLATION
WUNSCH: ECB HAS DONE CLOSE TO PERFECT JOB
ECB GOVERNING COUNCIL MEMBER WUNSCH SPEAKS IN WASHINGTON
ECB’S WUNSCH: EUROPE’S ECONOMY HAS BEEN RESILIENT
LAGARDE: ECB WELL POSITIONED TO FACE FUTURE SHOCKS
ECB’S KOCHER: NO NEED TO BE OVER-ACTIVE
KOCHER: ECB POLICY IS IN A `GOOD PLACE’
ECB GOVERNING COUNCIL MEMBER MARTIN KOCHER SPEAKS IN WASHINGTON
FRENCH-GERMAN 10Y SPREAD FALLS BELOW 76BPS TO LOWEST SINCE AUG
UK (Macro/Central Bank)
BOE’S GREENE: TRADE UNCERTAINTY COULD ‘CHILL’ ECONOMIC ACTIVITY
BOE’S GREENE: IMPROVED EU TIES WOULD HELP CONTROL INFLATION
GREENE: PRETTY HIGH LIKELIHOOD OF SIMULTANEOUS SUPPLY SHOCKS
BOE’S MANN: WOULD BUY INTO ‘MORE RESTRICTIVE FOR LONGER’ PATH
BOE’S MANN: DON’T AGREE SHOULD LOOK THROUGH INFLATION SPIKE
BOE’S MANN: EXPECTATIONS DRIFTED FROM TARGET-CONSISTENT RATES
BOE’S MANN: TRADE IS NOT WEIGHING ON INFLATION
BOE’S MANN: DOMESTIC PRICE FACTORS DOMINATE EXTERNAL FACTORS
BOE POLICYMAKER CATHERINE MANN SPEAKS AT EVENT IN WASHINGTON
BOE’S MANN: COULD BE MORE FINANCIAL TURBULENCE GOING FORWARD
BOE’S MANN: INFLATION PERSISTENCE IS MAIN POLICY CHALLENGE
BOE’S MANN: RESTRICTION NEEDED TO REIN IN PRICE EXPECTATIONS
BOE’S MANN: ECONOMIC ACTIVITY MODEST, LABOR MARKETS SOFTENING
BOE POLICYMAKER CATHERINE MANN SPEAKS IN WASHINGTON
BOE’S MANN: DOMESTIC COMPONENT IS DOMINANT INFLATION FEATURE
Japan (Macro/Central Bank / FX Backdrop)
BOJ’S UEDA: WILL COLLECT MORE INFORMATION BEFORE OCT. DECISION
BOJ’S UEDA: WILL TIGHTEN IF EXPECTED OUTLOOK MATERIALIZES
BOJ’S UEDA: TARIFF IMPACT HAS BEEN EMERGING WITH A LAG
BOJ’S UEDA: GEOPOLITICAL, TRADE TENSIONS POSE DOWNSIDE RISKS
BANK OF JAPAN GOVERNOR UEDA SPEAKS IN WASHINGTON
BOJ’S UEDA: THE GLOBAL ECONOMY REMAINS RESILIENT SO FAR
JAPAN’S VICE FINANCE MINISTER MIMURA SPEAKS IN WASHINGTON
JAPAN’S MIMURA: WELCOME NATIONS INTRODUCING STABLECOIN RULES
China/Asia–U.S. Relations
YONHAP CITES STATE DEPT ON CHINA SANCTION AGAINST SKOREA HANWHA
US SAYS CHINA BIDS TO WEAKEN US-SKOREA SHIPBUILDING TIES:YONHAP
CHINA’S WANG YI CALLS FOR EFFECTIVE COMMUNICATION WITH US
DECOUPLING BETWEEN CHINA, US ISN’T RATIONAL CHOICE: WANG YI
CHINA’S WANG BLAMES US’S RESTRICTIVE MEASURES FOR TRADE TENSION
Macro Tear Sheets: Equities, Stock/Bond Correlation, Fixed Income, FX, Crypto, and Commodities
Macro Regime Dashboard: Excel spreadsheet for economic data, interest rates, and real estate.
Momentum and Mean Reversion Models: Equities, Commodities, Fixed Income, and Currencies
You can find the educational primer and video explanation of these models here: LINK
Growth, Inflation, Fixed Income, Credit, and Equities Regime Tracker
The Macro Regime Model offers a real-time view of growth, inflation, and yield curve dynamics, integrating these with credit market shifts, equity risk premiums, and positioning data. It connects upcoming catalysts to statistical drivers of asset prices, creating a unified framework that quantifies skew and clarifies risk-reward across asset classes.
Key Points To Set The Context:
US Market Wrap: Credit Jitters Dominate; Fed Caution vs. Growth Risk; Banks Lead Drawdown (S&P −0.96%)
The tape cracked as regional-bank stress returned to center stage and credit worries overwhelmed a steady Fed message. The S&P 500 fell −0.96%, a broad de-risking that pushed gold to fresh highs and pulled Treasury yields lower (10y ~4%, 2y making new cycle lows). With earnings unable to offset the macro overhang (tariffs, shutdown, AI froth), the path of least resistance was down, and most painfully for Financials.
Sector Attribution
Weighted Return Contribution (S&P −0.96%)
Financials (−0.34%) was the single largest drag, eclipsing Tech (−0.14%). Discretionary (−0.12%), Communication Services (−0.09%), Industrials (−0.09%), and a cluster of defensives—Staples, Utilities, Health Care, Energy (each around −0.04%)—added steady bleed. Materials and Real Estate were marginal (each −0.01%). The message: this was a credit-led draw, not a pure growth/tech unwind.
Unweighted Performance (Breadth)
Breadth was decisively risk-off. Financials (−2.56%) collapsed on renewed regional-bank concerns (bad-loan disclosures), with Utilities (−1.47%), Energy (−1.34%), Discretionary (−1.19%), Staples (−1.10%), Industrials (−1.05%), and Real Estate (−0.58%) all weak. Tech (−0.40%) and Materials (−0.40%) slipped but were not the epicenter. Communication Services (−0.87%) rounded out the broad deterioration. This is classic “credit scare → beta and yield-sensitives sell together.”
Macro Overlay
Catalyst mix: Headlines around bad loans at two regional lenders reignited fears about the health of U.S. credit just as shutdown risk and tariff noise linger. Asia is set to follow lower. Haven demand surged, gold to new records, while oil slipped to fresh five-month lows on rising de-escalation hopes around Russia supply.
Policy: The Fed tone stayed steady but split on dose. Governor Waller leaned into “careful cuts” (25 bp steps, watch the labor softening), while Miran argued for a larger move given tariff-driven downside risks. Markets still price a gradual easing path through 2026, but today’s price action said the growth/credit channel, not inflation, is steering risk.
Rates/FX: Bullish duration with curve rally led by the front end (labor cooling + credit nerves). The dollar eased as havens rotated to gold and JPY, but FX stayed orderly, this was about domestic credit first, global risk second.
The Read-Through
This was a credit-led risk-off, not a simple cyclical wobble. Financials’ outsized weighted drag confirms the locus of stress; Utilities’ and Staples’ weakness alongside falling yields flags de-risking rather than a clean “defensive bid.” If the bank headlines remain contained, the damage stays tactical; if not, the equity-bond correlation flips back to “bad is bad.”
US IG Credit Wrap: Credit Nerves, Fed Dovish Drift, Spreads Still Anchored in Mid-50s (IG OAS ~54.9 bp)
IG took the bank-scare headlines in stride. Despite equities rolling over (S&P −0.96% with Financials the heaviest hit), gold at fresh records and a front-end rates rally, cash IG stayed orderly and OAS held the familiar mid-50s channel. Tone = “risk wobbly, carry intact.”
Where We Sit (from the chart)
IG OAS: ~54.9 bp (last 54.87)
5-yr avg: ~61.9 bp → ~7 bp inside
Cycle tights: ~46.1 bp → ~8–9 bp above
2022 wides: ~111.2 bp → ~56 bp tighter
Tape & Macro Overlay
Catalyst mix: Regional-bank charge-off headlines reignited credit worries; Asia is set to open softer.
Policy: Waller keeps pushing “careful cuts” (25s, watch the softening labor market). Miran argues for a larger move given tariff-shock downside risk. The market still embeds a steady easing glide through ’26.
Rates/FX/Commodities: Bullish duration (2y to new cycle lows, 10y ~4%). DXY softer; JPY steadier. Gold makes new highs; oil sits near five-month lows on rising odds of freer Russian flows.
Mapping to IG
Base case: 50–60 bp range persists. Fed easing + potential QT flexibility cushion funding; tariff/geopolitics cap the upside for spreads.
Banks: The locus of equity stress, but senior IG remains supported by abundant term funding and a friendlier rates backdrop; watch for idiosyncratic widening, not systemic.
Cyclicals (Energy/Materials/Industrials): Two-way with oil and tariff tape; stay up-in-quality, duration neutral.
Defensives (Staples/HC/REIT IG): Rich but resilient; carry over capital gains unless rates rally accelerates.
Risk Markers to Watch
Regional-bank disclosures/charge-offs breadth (does it spread beyond a couple names?).
Front-end OIS vs. data vacuum from the shutdown (labor signals will steer the dose of cuts).
Gold ↑ / oil ↓ mix: clean credit hedge vs. creeping growth scare.
This was a credit-led equity drawdown day, but IG beta didn’t crack. As long as bank stress looks contained and the Fed stays in easing mode, IG OAS should remain range-bound with a slight grind-tighter bias inside 50–60 bp. A decisive break wider likely needs a genuine growth or funding shock; absent that, carry still does the work.
Mag7 Model:
See the intro published for how to use the Mag7 models here: Link
Capital Flows Interest Rate Sensitivity Model:
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Launch video for these models is here: LINK
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