sellside observations for the week ahead (04/17); Waller must not have gotten rate CUTS memo; largest net SHORT 10y since 2018?

Good morning / afternoon / evening (please choose which ever one which best describes when ever you are stumbling across this shorter than short note) …

First, HERE ARE a collection of narratives and few words from some of the popular kids on Global Wall Street…a few items of note,

CSFB suggesting one should ‘fade gold strength … for now’
EPB Macro update, “Consumer Pressure Continues”
GS revising yield forecasts in note titled, ‘LOWER, NOT LOW'
MS adding a LONG 5y
WFC lookin for JUNE FOMC PAUSE and …

… If, as we expect, economic growth starts to buckle later this year, we then expect the Fed to begin to ease policy. We forecast a sizable amount of easing to take place in 2024 and see the fed funds rate falling back to a range of 2.25%-2.50%

There’s more. More than one shop bidding adieu to eurodollar futures and I’ve gotta be honest with you, bit surprised how much ink spilled in defense OF the pause at least relative TO the other way ‘round…Then again, the narratives following the price and the price continues to suggest rate CUTS.

Bloomberg’s Weekly FIX - One and DONE,

Mark May 3 in your calendar now. That’s when traders expect the Federal Reserve to hike rates for the last time in this tightening cycle.

Despite repeated push back from central bankers, the market is now betting on three rate cuts this year from that peak, firm in the belief a US recession is looming.

It’s not just traders expecting the economy to get worse, with four-out-of-five participants to a survey by the International Association of Credit Portfolio Managers expecting a US recession in 2023 and a rise in corporate defaults. That poll comes as the US junk bond market shrank to $1.41 trillion, down 11% from its peak in October 2021. 

These forecasts of economic gloom have investors on the hunt for bond markets primed to outperform if the global rate-hike cycle is indeed close to a peak… 

Guessing, Waller SPEECH — he didn’t get the RATE CUTS COMIN’ memo?

Now as the data dust settles, to the zerohedge, first the BAD news (or is it good,

Retail Sales Slide More Than Expected, Grow At Weakest Annual Pace Since June 2020

… Bottom line: the 'lag' from monetary policy, coupled with the hit to spending following the bank crisis is starting to catch up.

So as good (or bad) as you may wanna view the ReSale TALES data … really is all for naught as about 15mins later, Waller comments HERE, dropped. ZeroHedge,

Hawkish Comments From Fed's Waller Send May Rate Hike Odds Surging

Adding TO (or countering earlier ReSale Tales weakness),

Industrial Production Beats After Near-Record Surge In Utility Output To Heat March Freeze

Ok, you are more than competent of heading TO ZeroHedge on your own and SO … I’m moving on. Taking a moment to pause and consider POSITIONS. Earlier in the week everyone was buzzin’ about SPX positions and how specs net short was most since 2011 (see HIT HERE).

Large NET shorts in stocks, then. OK, great. What about BONDS, you may ask? Well, I’m glad you did…

Hedgopia showing net spec short 10yy up a touch WoW BUT … they are now, “HIGHEST SINCE October …”

October … of 2018, folks …

Net short STOCKS and bonds …

Where IS everyone hiding? Bitcoin?

OH … nevermind … As the wait for HIMCOs Q1 missive goes on (check out EPB Macros latest … should help tide you over), I’ll bring this to a close … soon but first, in as far as some ‘official’ reading, I’m going to add THIS ONE on MBR (Minimum Balance Risk) from the FRBNY to MY list …

The note concludes,

…To Sum Up
The MBR was introduced a decade ago as a means of mitigating run risks in MMFs.  The Financial Stability Oversight Council (FSOC) included the MBR as part of one alternative in its 2012 “Proposed Recommendations for Money Market Mutual Fund Reform,” and eight years later, following the run on MMFs in March 2020, the President’s Working Group on Financial Markets again identified the MBR as an option for MMF reform. Here, we’ve shown that the MBR could be used to mitigate risks in another run-prone segment of the financial markets, uninsured deposits at banks.

Dunno ‘bout you … am not feelin too much better but … so it goes.

AND for any / all (still)interested in trying to plan your trades and trade your plans in / around FUNduhMENTALs, here are a couple economic calendars and LINKS I used when I was closer to and IN ‘the game’.

First, this from the best in the strategy biz is a LINK thru TO this calendar,

Wells Fargo version, if you prefer …

… and lets NOT forget EconOday links (among the best available and most useful IMO), GLOBALLY HERE and as far as US domestically (only) HERE …

ALMOST DONE … but first … jobs data ahead of a recession be like the 5 stages of RTO,

Ok ok … i’ll stick with my day job … here are a few tax day related visuals,

Sign hanging outside every accounting classroom in area high schools here,

For those about to hit send on tax returns,

AND … THAT is all for now. Enjoy whatever is left of YOUR weekend …