Trades: Opening Macro Trades

Signal to noise

See the recent update I provided on equities here:

Big Picture:

The macro regime is characterized by low credit spreads, marginally elevated inflation expectations, and a neutral stance by the Fed. (credit spreads in white and inflation swaps in blue).

Powell’s pressure today revealed there is limited upside in the 2 year which means the level we continue to bounce against is likely to hold:

The most recent downward move in the Atlanta Fed GDPnowcast is primarily due the inventory component even as fixed investment accelerates:

While the push higher in the long end has been considerable, we are likely to see the higher level of nominal rates keep a ceiling on inflation expectations.

This macro context is directly connected to the positioning signals we saw today and they frame the specific trades to take over the next 2 weeks.

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Trades: