Week Ahead: CPI And Trades For The Week

We have arrived at an important week

Hello everyone,

A lot of traders have intentionally positioned themselves into this week because we have the CPI print. Let me explain it like this: YTD we have had an aggressive reversion in the pricing of the forward curve. Now we have a catalyst that will begin confirming or falsifying that positioning.

If you actively trade fixed income, CPI prints, and FOMC meetings are the most important catalysts. If you have been following my work then you know my views: Recession is unlikely given the current state of economic data and market signals. I have been bullish on equities, bullish on BTC, and then been actively trading bonds and the FX.

This week will mark an important shift. Several things to set the context before we jump into it:

• See the comprehensive macro report here: Link

• See the inflation report here: Link

• See the most recent video breakdown I did here: Link

• Sign up for the macro webinar here (this is for paid Subscribers but if you start a free trial then you’ll be able to join because it’s this Tuesday): Link

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Week Ahead:

Main idea: We continue to be in a regime characterized by flows moving aggressively out the risk curve. The primary avenue these flows will be reflected is in risk assets. Bonds and FX price action will provide confirmation but the largest moves are likely to be concentrated in equities.  

The primary events for this week will be the CPI release and OPEX:  

While CPI could potentially cause a marginal pull back in equities, the trend remains to the upside.  

Reserves continue to move to the upside to support liquidity:  

And equities have diverged as the forward curve has repriced YTD to reflect fewer cuts:  

Views and Trades: