And btw, if u enjoy that view. U sell payers on the skew that is 1y steep, and take out duration via German bonds for a beautiful conditional asw trade. Gg
I really want to fade the probability that the ECB will ever hike again, but still won’t touch their bonds with a firetong. Does that make me a bull 🐂 or a bear 🐻
Back in the game next week.
Let’s. Dance.
It’s tempting to run with the FEDs fifty was a policy error camp, but I’m not disregarding this many indicators saying the same thing. Don’t fight nature. US still needs cheap funding, and they can’t afford higher UR. Steepening will go again 🔥2/2
Kansas City Fed with their overpowered labor market indicator. Release today suggests weakening trend is still on despite last two stable prints.
This indicator helps me remind myself that last months strong headline NFP is just noise vs the size of the revisions we have seen 1/2
Which is why I think dovish JPow will stiffarm the hawks this week. If they go 50 and jobs come strong, then he simply skips November. If he only goes 25 and jobs come weak, then he is looking at intrameeting action. #FOMC#FED 2/2
Couple of good ones stolen from db. Rents indicate OER will continue its path towards 0 q/q. This will drag supercore into deflation as the lags are worn. New forecast from CBO shoots net interest / GDP to new highs. US can’t afford a recession. 1/2
@MikaelSarwe I really like your charts Mikael, but dont u end up with severe multicollinearity in these models? And are your parameter estimates time varying actually? Thank you for great charts always 🙏
Paternity taught me that raising a baby is the same as running a short vol book. You always want to get rid of it, but if someone touches it, you end them #sleeplessnights