New CPI Model/Macro Tear Sheets: Hedging Unwind Into CPI
The tools and views into CPI
CPI Planning:
As we move into the CPI print this week, it is important to have a clear view of WHAT is happening in order to properly plan for the distribution of outcomes.
The educational primer on this topic is here:
Alpha Primer on Hedging and Macro Catalysts
All educational primers: Link
Model:
The Macro Rate Matrix Dashboard has been updated with the CPI and PCE data. All of the models are in one place for you. (Analysis using the dashboard is below):
Tear Sheets:
All of the Macro Tear Sheets on Fixed Income, Equities, Crypto, FX, and Commodities have been updated as well:
Moving Into CPI:
All of the macro views have been laid out in the recent report:
Comprehensive Macro Report
We are moving into CPI this week with the question, will the negative returns in equities continue, and HOW will rates function as the 10-year approaches 2023 levels?
The updated Excel model now has a tab with inflation metrics and there are several things I want to point out as we move into this CPI print.
First, the broad rate of change for YoY core CPI remains skewed to the downside but we are slowing LESS than a year ago:
Second, this is taking place as the headline component has a marginal degree of upward momentum:
The tension is that the overall breadth of CPI isn’t low enough to bring inflation risk down while the more volatile components oscillate:
This is why understanding the CPI print this week is important.
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