Signum

automated data analysis

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[Signum @realSignum]

I have resumed daily rates updates via bluesky @realsignum.bsky.social. Life is so much easier over there.

[Signum @realSignum]

As Twitter has disabled free API, daily updates are moved to Telegram channel "Signum". You can subscribe via link before
https://t.co/TLb7CSnwVu

[Cassandra Unchained @michaeljburry]

1. Never stop exercising or learning.
2.Accept compromise to begin relationships.
3. Manifest the power of compounding.
4. Never gamble.
5. Have kids and be a good parent
6. If it flies or floats, rent it.
7. Buy half the house you can afford.
8. Art in the eye of the beholder is cheap.
9. Be thankful for and to all.
10. Be charitable.

[Signum @realSignum]

Although CPI MoM drops from 0.5% in May to -0.4% in June, a huge drop (3 standard deviation move), annualized 3-month inflation is still 2.784%!!!

[Signum @realSignum]

(inflation linked) TIPS outperforms nominal bond (IEF) since Iran war (Feb 28), and entire inflation cycle since 2021, on total return basis.

[Signum @realSignum]

"this is a massive mis-priced tail risk"

[KKGB @INArteCarloDoss]

I am not predicting that it will, but having followed how everything unfolded since day one, this is a massive mis-priced tail risk. It’s futile to debate inflation vs demand destruction shock, the bottom line is this will hit earnings and sentiment like a hammer.

11/11

[Signum @realSignum]

@KathyJones 🎯

[Signum @realSignum]

@siddiqui71 Are you in "for you" mode? If so, try "following mode", and "most recent" not "popular".

[Signum @realSignum]

TIPS (Treasury Inflation-Protected Securities) will outperform in this situation as it gains in bond rally and extra return on inflation rise.

[Warren Pies @WarrenPies]

Once bonds start rallying with oil, you’ll know the it is turning from an inflation trade to a recession trade…probably starts by the end of this week imo

[Signum @realSignum]

@FactSet Here is my multi-factor valuation index.

[Signum @realSignum]

@FactSet Here is my multi-factor valuation index.

[Signum @realSignum]

Some perspectives on 2/10 curves for US, Japan and Germany over thirty years. All have been steepening in last couple year, and Japan is the steepest. But they are still in the lower range in 30 years.

https://t.co/1ouWarj7hW

[Signum @realSignum]

@KathyJones @colbyLsmith @nytimes 🎯

[Signum @realSignum]

https://t.co/z3qIGvF4Oe

[Signum @realSignum]

10Y TIPS, 2.3% breakeven, 1.7% real yield, can be a good investment if WSJ opinion is true, as 3% is a new target effectively.

WSJ: Getting Used to 3% Inflation

https://t.co/RVQfOT7l0B

[Signum @realSignum]

if this argument is true, then JGB long end yields aren't high enough.
https://t.co/2p3W3BZGUZ

[Brad Setser @Brad_Setser]

And there are more Japanese specific arguments (which I tend to discount but perhaps wrongly) that Japan is now entering a new era of higher inflation and higher rates -- and thus Japanese institutions aren't yet comfortable with current JGB yields.

To be continued

5/5

[Signum @realSignum]

Japan's 10Y/30Y curve/spread reached 160 bps, unprecedented both from its own history and relatively to US and Germany.

[Signum @realSignum]

also check out my daily automated update on US Treasury curve, both nominal and real yields. example below
https://t.co/j2IxYwLZEW

[Signum @realSignum]

https://t.co/zZ4mzuIskW

[Paulo Macro @PauloMacro]

.82 correlation over nearly 20yrs but Scotty B’s models say we need 150+ bps cuts

Via Leuthold Group

[Signum @realSignum]

ISM service price paid (white line) is rising fast.

[Brad Setser @Brad_Setser]

All foreign demand for Treasuries in the last 12ms of data (through June) came from financial and custodial centers. Reflects the fall off in official purchases (tho some official purchases are now hidden) + rise of leveraged investors in the market. Big structural shift

1/

[Signum @realSignum]

This chart is 2Y inflation swap rate, i.e. market's inflation expectation, which is clearly trending up, further away from the norm in the past.

Is this a good time to cut policy rate? It doesn't look so.

If the Fed caves in to pressure, inflation will be likely more unpleasant

[Signum @realSignum]

Core inflation YOY among the Eurozone, Japan and US over thirty years.