Just a quick snapshot to update the Continuum’s status. Please recall that we are looking for the yield to make a lower high to the 3.5% (actual: 3.45%) high of November, 2018.
Today’s tick has hit 3.3%. Got to love the markets, always pushing things to the limit.
The bottom line implication would be that a notable change in the macro could well happen this week, during the most obsessed upon FOMC meeting, maybe ever. Nobody is looking for a deflationary episode other than the US dollar and the Gold/Silver ratio. The alternative to that is full on inflationary crack-up-boom with yields getting out of control.
I continue to lean to an unwinding of the inflation trades, including yields. But all I can do is update the macro pictures, get a box of popcorn and like everyone else, watch it unfold.
Think you’ve done an excellent job lately, maestro… And we agree that PM’s are the opportunity with the macro turning. The proportion between the handle and the cup is about right now, timewise. But it does not rule out one more lower low either. In some ways that would even make sense.
Sure could be, Bart. It’s all on the table now. At least we’ve shaken things loose and changed the macro. Now comes the part about how to manage it.