Macro Story - The story beyond the noise.

It has been almost one year that Macro Story became a subscription site. And I value my subscribers for your support. Through this year I have tried very hard to find the optimum balance of content for readers.

In the early days I believe the site was too macro focused. The reason I say that, is we are also here to make either a living or a return on our retirement and other investments. And the current centrally planned markets have evolved in such a way that too much of a focus on macro data can cloud one’s judgement. It can bias you in such a way that you miss opportunity.  Read More »

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As discussed for a while, counter trend rallies can push higher and longer than many anticipate. They don’t have to make sense, they can simply just go higher. And they certainly don’t look healthy. Case in point being today’s price action.

FX markets were neutral, the EUR and USD were literally flat on the session with the exception of the Aussie dollar down 20bp. So there was no confirmation from currency of risk on. Treasury was in risk on mode, though I do not believe we are witnessing a blow up of the bond market.

Commodities were fairly muted and thus not confirming risk on. Copper was down 30bp on the session while oil was up about 60 cents and the precious metals remain weak. The Powershares commodity index, DBC was also flat on the session.  Read More »

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A very heavy week of economic data is before us, ending with quadruple witching on Friday. As for the Fed only two speeches are scheduled this week, both of which are from the hawk side. The true hawk, and possibly the only sane member of the FOMC is Jeffrey Lacker. The Richmond Fed President has been the lone dissenter on record throughout this extremely dovish three year fiscal policy.

Dallas Fed President, Richard Fisher, though not a dissenter has been outspoken about Fed policy. His most recent speech compared QE4 to the song Hotel California. Where as he says “we can check out any time we want from this program, but we can never leave” due to an engorged balance sheet.”

On Thursday we will see leading indicators, followed by the Chicago Fed national activity index on Friday. Both of which have been showing very strong recessionary signals (as shown below).  Read More »

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After another round of unprecedented money printing by the Federal Reserve (call it what it is right, why hide behind a fancy term like quantitative easing) it’s time to see how the credit markets are reacting aside from Treasury.

Treasury nominal and real yields (TIPS) are pushing recent highs in terms of inflation expectations, but what is the rest of the credit market indicating? As we normally do, we’ll take a look at corporate debt, commercial paper, eurodollar deposits and interest rate swaps.  Read More »

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A weekly update of market and economic indicators across various asset classes. Read More »

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There was a time when markets did not like uncertainty. It would cause a selloff. Today the complete opposite is true. They love it.

Leading up to QE3 in September markets rallied. What would the Fed do they pondered. Will they finally give us more QE? Or will they disappoint as they have for over a year? Seems pretty uncertain to me. Then the announcement comes, an open ended QE. Yet there was no rejoicing. Markets were too busy selling.

Fast forward to the launch of what is probably now QE4 and markets rallied into the news. Another half a trillion a year in QE. And markets selloff. Read More »

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Where do we begin. What a day. Let’s first start with the facts. QE is now one trillion (give or take a few hundred billion) annually. And though down on the session, the dollar was up from the announcement. The other gauge of QE and dollar debasement, that being the precious metals, though up on the session sold off after the announcement. In theory those type of movements should not have happened. But they did.

As for the rest of the asset classes, the response was mixed. Treasury sold off pushing yield higher. Why is unclear. Possibly because of the inflationary threat related with such an increase in the money supply. It’s worth noting after moving up on the announcement of QE3 in September, rates then fell pretty quickly over the next few weeks. So the verdict is still out there.  Read More »

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