Skip to content

Macro Monitor

Aug 06 2019

When A Cut Is Not Enough

  • Aug 6, 2019

The recent rate cut managed to bring policy uncertainty back into the market by two seemingly harmless words—”mid-cycle adjustment.”

Aug 06 2019

Risk Aversion Index: Stayed On “Higher Risk” Signal

  • Aug 6, 2019

A hawkish Fed cut, immediately followed by Trump’s new tariffs, caused quite a bit of market indigestion, a clear reminder of how quickly things can change.

Jul 04 2019

Risk Aversion Index: Stayed On “Higher Risk” Signal

  • Jul 4, 2019

Our Risk Aversion Index fell in June but stayed on the “Higher Risk” signal generated in May.

Jul 04 2019

Slowdown Or Recession? Confidence Is Key

  • Jul 4, 2019

The pattern of sharp sell-offs followed by equally sharp rallies continued in June. Most risky assets recouped nearly all the losses suffered in May, and then some.

Jun 07 2019

All That You Don’t Hear About The Curve

  • Jun 7, 2019

While the 10Y-3M curve inversion does warrant extra attention, movements in other parts of the curve also need to be taken into consideration.

May 07 2019

Signs Of Margin Pressure Ahead

  • May 7, 2019

Banks’ lending standards for C&I loans (typically to large businesses) tightened quite a bit in Q1, which bodes ill for both investment and overall economic growth going forward.

May 07 2019

Risk Aversion Index: Maintains “Lower Risk” Signal

  • May 7, 2019

Our Risk Aversion Index ticked lower in April and stayed on the “Lower Risk” signal. Most risky assets participated and the rally was broad-based. The only fly in the ointment is EM assets. The recent weakness in both Chinese stocks and the Yuan is certainly worth paying attention to.

Apr 05 2019

On The Cutting Edge—End Of Fed Hikes?

  • Apr 5, 2019

The Fed not only signaled no rate hike for the rest of 2019, but also committed to unwinding its balance-sheet reduction program, starting in May and ending in September. The market took it one step further and priced in a rate cut in the second half of 2019.

Apr 05 2019

Risk Aversion Index: Stayed On “Lower Risk” Signal

  • Apr 5, 2019

With most major central banks now turning dovish, our view on credit is more constructive. We still view pull-backs in EM assets as better entry points. Investment grade corporate bonds are also attractive, and we maintain a neutral view on Munis and High Yield bonds.

Mar 06 2019

The Great British Breaking Show—All You Need To Know About Brexit

  • Mar 6, 2019

The biggest near-term wild card is the infinitely confusing and hopelessly unpredictable Brexit.

Mar 06 2019

Risk Aversion Index: Stayed On “Lower Risk” Signal

  • Mar 6, 2019

While global central banks’ dovish turn provides a supportive backdrop for the risk rally, short-term overbought conditions are everywhere too.

Feb 07 2019

恭喜发财- Red Envelopes From The Fed & PBoC

  • Feb 7, 2019

A significant policy move by China’s People’s Bank of China (PBoC) has gone largely unnoticed.

Feb 07 2019

Risk Aversion Index: New “Lower Risk” Signal

  • Feb 7, 2019

With the Fed now pausing its rate hikes, and the PBoC recapitalizing banks and reactivating lending, our view on credit has turned from defensive to neutral, with a more constructive bias. One of our biggest concerns, global central bank liquidity withdrawal, has been eased by the recent policy moves.

Jan 08 2019

Tightening And Trade Risks Still Underestimated

  • Jan 8, 2019

Many were caught off guard by the relentless drop in stock prices and bond yields, but we think the real problem is that most people have underestimated the twin threats of central bank tightening and the ongoing trade war with China.

Jan 08 2019

2019 Time Cycle—Hope Springs Eternal

  • Jan 8, 2019

We are heading into a pre-election year that boasts one of the best time-cycle patterns. Most markets, Developed and Emerging, show good patterns for 2019, even with different election cycles.

Jan 08 2019

Risk Aversion Index: New “Higher Risk” Signal

  • Jan 8, 2019

Despite some near-term oversold conditions in risky assets, we continue to recommend defense and expect higher volatility to remain across all asset classes.

Dec 07 2018

The Fed Should Pause And It Will

  • Dec 7, 2018

Liquidity reduction (QT) by global central banks is already showing up in slower M1 growth in all G3 countries. Slower M1 growth has led economic slowdown by about twelve months.

Dec 07 2018

Bond Yield Proxy—A Tool For Equity Investors

  • Dec 7, 2018

We created an equity basket that can track the movement of the U.S. 10-year yield. Overall, it does a good job of capturing the major moves.

Dec 07 2018

Risk Aversion Index: New “Lower Risk” Signal

  • Dec 7, 2018

Despite the recent signal whipsaws, we have been cautious toward all risky assets and we continue to recommend defense amid higher volatility across all asset classes.

Dec 07 2018

US Bonds

  • Dec 7, 2018

Despite the recent signal whipsaws, we have been cautious toward all risky assets and we continue to recommend defense amid higher volatility across all asset classes.

Nov 07 2018

Divergence Everywhere—A Cross-Asset View

  • Nov 7, 2018

The 40 bps jump in the 10-year yield, a 2-standard-deviation event, occurred within a five-week win-dow. Interestingly, historical data doesn’t suggest a continued increase in the near term.

Nov 07 2018

Risk Aversion Index: New “Higher Risk” Signal

  • Nov 7, 2018

We have been leaning toward the defensive side despite the recent signal whipsaws and we continue to recommend caution in light of the increase in volatility across all asset classes.

Nov 07 2018

US Bonds

  • Nov 7, 2018

A significant rise in real yields would make us turn cautious toward all spread products.

Oct 05 2018

Mid-Term Elections—History Might Not Be A Good Guide

  • Oct 5, 2018

While mid-term elections are rarely big market movers, this year’s election demands more attention as it has the potential to alter the balance of political power in Washington.

Oct 05 2018

U.S. Rates—Driven Higher By Real Yields

  • Oct 5, 2018

The recent move higher in rates had broader support as other major markets also saw higher rates.

Oct 05 2018

Risk Aversion Index: New “Lower Risk” Signal

  • Oct 5, 2018

Our Risk Aversion Index fell sharply last month and triggered a new “Lower Risk” signal. Caution is still strongly recommended, and we favor higher-quality credit within fixed income.

Oct 05 2018

US Bonds

  • Oct 5, 2018

Attractive relative valuation outweighs concerns about heavy issuance and moderate deterioration in underwriting standards.

Sep 07 2018

EM Crisis? Not There Yet

  • Sep 7, 2018

What some EM countries are going through is a classic sequence that can potentially lead to a full-blown EM crisis.

Sep 07 2018

Yield Curve Proxy—A Tool For Equity Investors

  • Sep 7, 2018

The increasingly greater attention given to the yield curve by equity investors has prompted us to come up with an equity basket that can track the movement of the yield curve. Overall, it does a reasonably good job of capturing the major moves.

Sep 07 2018

Risk Aversion Index: New “Higher Risk” Signal

  • Sep 7, 2018

Our Risk Aversion Index reversed higher last month and triggered a new “Higher Risk” signal. We recommend a defensive stance within fixed income.

Sep 07 2018

US Bonds

  • Sep 7, 2018

Both interest rates and investment grade spreads are at a reasonably attractive level to provide downside cushion.

Aug 06 2018

Risk Barbell Or Middle Of The Road?

  • Aug 6, 2018

The underperformance of investment grade credit this year prompted the question of whether a risk-barbell portfolio of safe Treasuries and risky high-yield bonds may offer better performance than a middle-of-the-road portfolio of 100% investment grade corporate bonds in a highly-uncertain environment.

Aug 06 2018

2018 Time Cycle—Mid-Year Update

  • Aug 6, 2018

2018 has been very atypical so far. But if the historical pattern is any guide, a near-term pull back should be expected in most equity markets, followed by nice year-end rallies.

Aug 06 2018

Risk Aversion Index: A New “Lower Risk” Signal

  • Aug 6, 2018

Our Risk Aversion Index fell enough last month to generate a new “Lower Risk” signal. This is certainly not a “no brainer” risk-on signal. We recommend higher quality spread products within fixed income.

Aug 06 2018

US Bonds

  • Aug 6, 2018

While we believe overall volatility is likely to stay high, both interest rates and investment grade spreads are at reasonably attractive levels to provide a downside cushion.

Jul 07 2018

Investment Grade Widened More Than High Yield: Implications & More

  • Jul 7, 2018

As credit spreads widened, something rather unusual happened: investment grade Corporate bonds performed far worse than High Yield bonds.

Jul 07 2018

Risk Aversion Index: Stayed On “Higher Risk” Signal

  • Jul 7, 2018

We believe the negative impact of central bank liquidity reduction is here to stay for the foreseeable future. We recommend defense within fixed income.

Jul 07 2018

US Bonds

  • Jul 7, 2018

Political risks linger and the M&A picture remains active.

Jun 07 2018

All Crowded Trades Are Vulnerable—Even The Yield-Curve Flattener

  • Jun 7, 2018

Bond market volatility picked up quite a bit in May but the higher-low/higher-high pattern in the 10-year yield is still intact, indicating the primary uptrend has not reversed.

Jun 07 2018

Risk Aversion Index: Stayed On “Higher Risk” Signal

  • Jun 7, 2018

Volatility among non-equity asset classes has gone up noticeably while the VIX dipped lower. We still expect volatility to stay high and continue to play defense within fixed income.