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Observations Of The Credit Cycle Moving Into FOMC
Alpha Reports

Observations Of The Credit Cycle Moving Into FOMC

The flows setting the stage for a larger structural change

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Capital Flows
Jul 26, 2025
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Capital Flows
Capital Flows
Observations Of The Credit Cycle Moving Into FOMC
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The Feedback Loop Driving Macro Flows:

Over the last trading week, credit spreads have continued to compress, indicating that financial conditions remain highly accommodative. This is further reflected in low-quality stocks in the US (white line) maintaining their bullish trend. Additionally, the Z-Score of low quality sectors remains in positive territory, which indicates the strength of the trend in the credit cycle we are currently seeing.

This function of low-quality sectors rallying is directly linked with the logic I laid out for long-end rates here:

Alpha Reports

Strategic Positioning: Rates, Curves, Currencies

Capital Flows
·
Jul 25
Strategic Positioning: Rates, Curves, Currencies

The Macro Context For Flows:

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