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The GreenBack Guy.
@Greenback_guy
Discretionary G8 FX Trader β Macro Observer β Politics & Economy π¨βπ
Joined July 2023
270 Following
373 Followers
1K Posts
Most mental chart π
$JP10Y or meme coin ..
@BeSomebodyFX Impressive man. π
@sdav1986 https://t.co/3uWIZTJKYk π«’
$US10Y
I can't see the 10Y not reaching 4.5% by end of H1.
Warsh's commitment to trumps path of lower interest rates means investors are pricing in a "run it hot" scenario.
Investors are also sceptical of global appetite for US debt. The $9 Trillion debt wall needs to be re-financed at 3x the interest rate it was before, all while US global relations are deteriorating.
@yieldsearcher I agree with this assessment completely
@JeremyWS Great readπ
@yieldsearcher Exactly, I am of the opinion there will be no moves this year bar the scenario you touched on $200 oil. Next direction cuts next year between, June 27-December 27
@yieldsearcher & rates were materially much lower, arguably rates are already in restrictive territory.
"But the fed looked through supply shock inflation and ultimately u-turned in 2022 and raised hikes". People unfortunately fail to see the difference in context between then & now. Inflation was already rising pre Ukraine conflict in 2022, labour market was tight and consumer was in much better shape. It's like markets have forgot the mandate isn't singular & labour market concerns haven't fully evaporated where still one really soft job print away from being in the same position as we were in January.
I recognize that headline inflation and its effect on the avg Americanβs standard of living is real.
However, when it comes to the Fedβs policy response, there is a reason it targets βcoreβ inflation, which specifically excludes food and energy. The reason is they tend to move independently of business cycles, and the Fedβs dual mandate is ultimately about managing the cycle. Core inflation is therefore a better measure of underlying economic conditions.
There are different types of inflation: demand-driven inflation from an overheating economy, and supply-shock inflation, which can actually act as a demand destroyer. Powell, Williams, and Goolsbee have all acknowledged that inflation can take different forms, and why none are currently thinking of hiking at this stage.
The missing link between higher oil prices and sustained, broad based inflation is the labor mkt/wage growth. Because the US economy is ~80% services, services inflation tends to follow wages over the long run.
If the labor market heats up, I would reconsider my view. But as Powell has noted, the labor market still appears to be softening, and wage growth has been relatively subdued.
And if we run out of physical oil and they go $200+, well, we are def going to have a new financial system at that pt anyway, so all this inflation/growth argument becomes moot.
$EURUSD $ER3Z27
After this morning's PMI data for Europe, market is increasingly removing the self-limiting premium on ER3Z27. This makes a lot of sense when you think of Europe's scenario unique compared to BOE, a few hikes for ECB will still have their rate under 3% and relatively neutral-accommodative. As long as economic data stays somewhat strong consistently, the easing premium in z27 will eventually be removed and most likely price a hold after the short hiking cycle.
@Dcpcooks Time will tellπ. Will be interesting to see how he handles his peers.
I agree.
Wow, you have earned a vast ocean of knowledge going that far back
The irony is Greenspan was also under political pressure to cut, I have a feeling Warsh wonβt be as defiant.
He seems to have a 101 new ideas and models to ascertain inflation & reduce the balance sheet. All engineered to facilitate Trumps wishes.
@TraderBillyAU Cleanest hiking path seems to be CRA. Energy insulation from Oil production, Current rate already on the lower end of BOC neutral zone, output gap starts closing & turns positive and CRA future path will be validated. Love to get your take on it..
You know Asia is truly short of crude oil when Japanese television covers the arrival of a single oil tanker from America as a major news story
@Dcpcooks Good luck mate π
Of course you do
$CHF is a no go zone for the foreseeable future
SNB Vice Chairman tells Broadcaster RTS: We have a greater willingness to intervene in the foreign exchange market.
@MaxFx_28 Similar occurrence for me W $GU today.
Iran & Trump went back to back. The downside price action was Trump de-escalating. Iran Re-escalating drove oil prices back up, driving CAD up aswell.
Moral of the story, Orange man is seeking our stops bro.
Sums up the market.
Am short $GU, do I leave position or add??
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