The Saturday Hark Back - 21 Oct 2023
Capturing the themes of the week when there’s more time to digest them.
The Hark Back
The key narratives that drove markets last week:
A dormant G10 FX market does little to capture the seismic moves that we've seen last week in global duration, MAG7 equity leadership and ILS/Gold/Oil.
Fixed Income: The stars have aligned for a global duration sell off, there's a long list of reasons as to why JGBs are unwinding to their new YCC band, 30-year gilts are making the news and US 2s10s closed the week within a spread or two of un-inverting and even JPow mentioned term premium at Thursday's NY economic club... I'll leave it to the experts to explain the drivers, next steps and inflows to UST market (despite the "buyers" strike)...
Brent Donnelly - Friday Speedrun: October 20, 2023
Daily Chartbook - Daily Chartbook #306 ... 36 straight weeks of Treasury inflows, longest since 2010 (BofA)
The BondBeat - Belly leads USTs higher
The Capital Spectator - 10-Year US Treasury Yield ‘Fair Value’ Estimate
J.P. Morgan - FICC Market Structure: Top of Mind Themes for Q4
Nordea Macro & Markets - High Forever
J.P. Morgan EM Fixed Income - Rising yields and geopolitical tail-risks
UBS CIO - Return of the bond vigilantes?
SriKonomics - Lessons from bond market turbulence
However, it's not all bad news in fixed income, as Greece returns to investment grade, it's now yielding less than US10s.
It goes without saying the austerity that hit Athens was brutal for households, but as time has passed, tourism has flowed to the islands, hopefully the lessons of the past have been learnt and the future is extremely bright for one of the most beautiful countries to visit in Europe... @HarksterHQ should have listened to his colleague in 2016/17 and put more of his pension into GGBs!!!
We’ve come along way from …
Source BBC
Along with higher real rates, geopolitics has hit equities, gold and oil... Biden's latest chip measures have curbed Nvidia / ASML potential market as the AI frenzy pitters out, Apple continues to struggle to sell the new iphone in China whilst Musk hit Tesla hard, warning about consumer credit / appetite. It does make you wonder why a rational market wasn't able to price lower consumer demand for luxury goods (like UK retail sales). Why did we need Elon to tells us it was going to be a problem?
Reuters - Tesla CEO Musk's demand warning sparks selloff in EV stocks
WSJ - Venezuela’s Economy Poised to Strengthen With Sanctions Relief
GoldFix - China May Issue Gold Bonds
ZeroHedge - De-Dollarization? China Completes First Digital Yuan Purchase For Cross-Border Oil Transaction
J.P. Morgan Global Commodities: The constraints on risk premium
Top 10 Reads of the Week on Harkster.com:
Bloomberg - China Offers Record Cash Infusion to Keep Rates Low for Growth
ING - China curbs exports of battery-making graphite as global tech war escalates
Liberty Street Economics (aka NY Fed) - An Update on the Health of the U.S. Consumer
Capital Flows and Asset Markets - THINKING ABOUT PORTFOLIO CONSTRUCTION (Russell Clark reviews his GLD vs TLT trade)
Apollo Academy October Outlook For Public And Private Market
Blind Squirrel - Refocusing the 🐿️'s Ag Positioning
Timothy Ash (@tashecon blog) - Reflections on developments in the Middle East
Lyn Alden - October 2023 Rising Instability
Open Insights - A Penny for Two Thoughts, the Market & Middle East
The majority of these links appear in our new "HarksterPro - Intraday Market Colour" channel. If you click on "Select Channels", you should find under "Added Recently" our latest additions to the app. @HarksterHQ will use this new channel to flag good articles/sources of content as well as headlines/market moving events.
Top 5 Podcasts of the Week:
JPM Global Data Weekender - This week goes to 11
WSJ - A Conversation with OpenAI's Sam Altman and Mira Murati
The Inflation Guy - Mike Ashton If Gold is Like TIPS, Should I Buy it?
Bloomberg - This Is What an 8% Mortgage Means For the housing Market
Although 8% doesn't tell the true story for households..... as per Morgan Stanley via Barchart....
The Week Ahead
Looking forward to next week...
Scotiabank - Hope and Worry
S&P Global - Week Ahead Economic Preview: Week of 23 October 2023
Newsquawk - Highlights include EZ/UK flash PMIs, ECB, BoC, US PCE, Australian CPI
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