never sell the American consumer short; HFs BUY (stopped today?); UoMich
The following was sent Friday, 17 September just before noon …
Good morning. HERE are a few updated and bigger picture observations along with some noteworthy sell side observations from the week just about to pass.
This mornings update comes on heels of some technical breaks (or stop outs when 10yy traded above 1.37 -- 200dMA and TOP - see below) despite (because?) of University of Michigan Confidence data which BBG notes as, “Americans See Worst Buying Conditions in Decades on High Prices”. See story visual just below and as you end the week, note:
5yy and 30yy WEEKLY levels (30yy v 1.83 held, 1.91 -- 2019 LOWS then 1.97) support
Z2Z4 (aka WIN WIN) about to break EVEN, watch 105.5bps
ReSale TALES says -- BAMLs Michelle Meyer wins closest-to-the-pin! AND how / why one should NEVER Short the US Consumer (DataTrek)
TICS: HF buy MOST USTs since 2018
IDEA: still think bears and sellers might look at 20s (w/tight stops) vs 10s30s … and finally
a few Sell Side Observations: BNPs Q4 global outlook, A marathon, not a sprint (10s TO 1.70 then 2% by END ‘22); DBs long term asset return study, TS Lombard offered some thoughts on ‘flation in Minsky moment for central banks and for the macro tourists check out When the ‘V’ starts to fade. Barclays carries this theme along with THEIR latest quarterly global outlook, Looking Past the V which suggests message from bonds not so dire and the CONsensus view of a sell-off led by the long end is likely misplaced. Wait, what? 10yy are fair value? See inflation swaps and supply / DEMAND (12m net supply of Tsy direction and rate of travel). Finally I cannot help but stress one from Eric at EPB Macro who asks / answers THE inflation’istas call. Are You Worried About Rent Inflation? NOW I’m not...are you?
I END today’s note with a link thru to A STANO (latest monthly missive IF you’ve somehow missed it -- comments / feedback / ‘toon submissions welcome). Next update Monday. Here for any / all investments, trading, hedging, P&L and general duration needs.