If the current narrative is to be believed, as Europe is hurtling towards an ugly recession, the US economy is likely to enjoy a soft- or even no-landing. Hence, it is hardly surprising that all eyes, including ours, are focused on US yields (“MI2 Trader: Short Fixed Income” 2nd Aug).
Between yesterday’s policy statement and Madame Lagarde’s press briefing, the ECB confirmed that, like the Fed, they are operating in an “opportunistic policy” framework.
For some time, we have held the view that the setups in bond and equity markets are mutually exclusive and following on from our synthesis of prevailing macro conditions, we published a piece in August focusing on the rate-sensitive Nasdaq and homebuilders. In response to the piece, we got several interesting questions from clients regarding our idea that the homebuilders looked vulnerable. Therefore, we decided to share them with you via a series of charts along with our updated thoughts on housing and the builders.
We apologise for interrupting your summer break. However, we believe that there are some really important macro trend developing that could accelerate into Q3/Q4. Therefore, we have prepared a short 40 minute video updating our latest thoughts on the macro and markets.