LOCKED MI2 Trader: Sell Bund
The speed of the current changes in the macroeconomic landscape in the last couple of months has been absolutely breathtaking.
March 26, 2025
The speed of the current changes in the macroeconomic landscape in the last couple of months has been absolutely breathtaking.
High rice prices have caught the BoJ’s attention. Given the market’s underlying structure, these elevated prices could drive inflation higher than expected and further support yen strength.
The apparent removal of the Trump put has sent equities into a tizzy. So imagine what could happen if higher inflation also ties the Fed’s hands!
We’ve watched with interest how, in the last few weeks, the market has slowly shifted to our view that US Exceptionalism has peaked. We also noted how this weekend, Bloomberg wrote a story entitled “Misfiring Wall Street Wealth Engine is Anxious Omen for Economy”, in which they picked up on our theme that falling stocks could weigh on consumption. However, they’ve failed to recognise that the whole market and economic setup could be reflexive, predicated on a strong $ and robust growth and outperforming assets, which all look shaky.
In last week’s video, we emphasised that even though the FX market has been anesthetised for the last decade, it is important to understand that we are in a moment in history.
This is the second time in as many weeks we’ve used the word, but “wow” these moves are insane (“Trump’s Dollar” 17th Feb). That’s a problem when your job is to put pen to paper because they are happening so quickly that it is almost impossible to keep up. Hence, we want to keep it short and sweet by focusing on some charts and levels we are watching.
We wanted to ensure you didn’t miss last Friday’s important video update, Reality Bites. If you were out or overlooked our email, we are resending it, as this content has been flagged as extremely important and contains key insights you won’t want to miss.
This last weekend, in preparation for a couple of client calls, we sat down and poured over our extensive collection of charts. We ended up with a presentation that pulled no punches and elicited a lot of positive feedback. Hence, we have recorded a 45-minute video to share our thoughts with all clients. Essentially, we believe that we are rapidly accelerating to an epiphany event. A tipping point as investors start to wake up to the “reality” of the Trump Administration’s radical agenda. Policies which threaten to upend the equilibrium that has dominated markets for the last decade and, in the process, rapidly expose the fragility of the whole US economy.
