If you are like us, your morning meetings are currently reflective of profoundly frustrating and choppy markets, which is terrible news for P/L. The good news is that it affords us the time to kick the tyres of our underlying macro views to see if anything has changed and hopefully offers some trading clarity. To the latter point, we have found a trade that not only fits well with our macro outlook but also offers an attractive risk-reward.
At the start of the week, we explained that the most critical role of any macro analysis was identifying turns in the US dollar. We went on to explain how after a decade-plus of a virtuous reflexive appreciation, we believed the dollar could be on the cusp of a significant trend. However, having outlined some technical levels on our radar, we concluded that we still needed to see concrete evidence of a break.