A timely update to the 2s5s US Curve which is breaking higher with the resteepening after flattening from 2016. This breakout indicated we have marked a meaningful base with the next target in play at 29bps which is the measured target from a breakout.
(1) Every other time this happened it ended badly for the global economy via recession.
(2) A Fed that lags and finances the Whitehouse will only add fuel to the flames... "it's different this time".
(3) The longer the delay in USD devaluation from Fed, the worst the blow is going to be in Equity markets. Assuming USD does not devalue materially into 2020 its repo will grow and continue expanding the balance sheet , one way or another eventually this is going to look like Fed has been financing the WhiteHouse and then the game is up.
For those tracking the renewed steepening there are plenty of opportunities if you know how to capture the symmetry; for example Banks outperforming was a no-brainer:
Defensives outperforming:
Rotation in full swing:
End of the Cycle? Smells like it...
Recession is calling...
Thanks for keeping all the support coming with likes, comments, charts, questions and etc! Best of luck those tracking for the end of the cycle... this chart will be one for the history books.
(1) Every other time this happened it ended badly for the global economy via recession.
(2) A Fed that lags and finances the Whitehouse will only add fuel to the flames... "it's different this time".
(3) The longer the delay in USD devaluation from Fed, the worst the blow is going to be in Equity markets. Assuming USD does not devalue materially into 2020 its repo will grow and continue expanding the balance sheet , one way or another eventually this is going to look like Fed has been financing the WhiteHouse and then the game is up.
For those tracking the renewed steepening there are plenty of opportunities if you know how to capture the symmetry; for example Banks outperforming was a no-brainer:
Defensives outperforming:
Rotation in full swing:
End of the Cycle? Smells like it...
Recession is calling...
Thanks for keeping all the support coming with likes, comments, charts, questions and etc! Best of luck those tracking for the end of the cycle... this chart will be one for the history books.
評論:
A large 20% move here...
