MBCC TH 9th January'23 - "Where do $TLT/Bonds go from here? Why correlations can break down? How to be positioned in q1?

The markets rallied on Friday as the data “came in much better than expected” and slowdown not as bad. But unemployment was at 3.5% - why does this matter and what does it mean for Fed policy? A LOT! As that will dictate how you position for Dollar, and risk assets in general - yes it is ALL ONE BIG MACRO TRADE!

Because whether you are Dollar bullish or bearish here, it can save you from losing 20%-30% in your positions. So yes it does matter. We list out various factors in our note today, talking about all the macro drivers.

For now, focus is on Bonds. The Fed is on a path to do QT, “the amount of government debt that will need to be absorbed by the private sector in [2023] is larger than at any time outside of world wars”, and that "with US/Japan/EU/UK governments all set to issue $6 trillion in bonds in 2023" - who will or rather can buy this all up?

Everyone expects QE and Fed pivot, but we list why it is not about Equities and why Bonds will be in focus. And the old “higher prices” means higher long duration assets is not as straight forward. We list our trading ideas for Q1.

Sign up to find out, using old 2000-2004 and 1990s charts are irrelevant, anyone can fix a chart onto another and call a correlation! One needs to look at the factors and how they are evolving in the current cycle and most importantly, what is priced in and what is not!