Market Thinking

making sense of the narrative

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Month: February 2020

Traders go full deflation trade

Having held up remarkably well during the first full month of the Corona Virus pan(dem)ic, equity and high yield bond markets took a tumble this week as a combination of technical buying of US Treasuries – pushing long bond yields Read more…


COVID-19 cases plateauing, markets calming. Value opportunities emerging.

We said that we needed two things to be happening before engaging with markets over the Corona Virus panic. First, we had to see markets themselves begin to stabilise as distressed sellers are flushed out by asset allocators rebalancing portfolios Read more…


Circular arguments

FX traders are the ultimate noise traders, using vast leverage and chasing percentage moves that barely touch the real world. Next are the commodity traders, using less, but still meaningful amounts of leverage, then fixed income, again with leverage but Read more…


High and Dry

On the 4th September last year, the Baltic Dry Index that measures the cost of shipping – and by extension is a good proxy for the demand supply imbalance in global trade – stood at 2518. As of Friday, it Read more…


PanDemics and Dem Panics

At the start of the year we assumed that the biggest rise in market uncertainty would be due to US politics and that this would begin with the Democratic Primaries. While it is very unusual for US Presidents not to Read more…


Market Thinking January 2020

Summary. The markets began the year anticipating uncertainty falling in the UK and Asia, thanks to Brexit and trade talks finally making progress, with the anticipated rise in uncertainty being focused around US politics and domestic policy reactions in an Read more…


It’s the Legal System

As previously noted, my previous role was at a large, French, company and to say the least I was not encouraged to say anything good about Brexit, so as a result I said remarkably little other than to suggest that Read more…


Happy Palindrome

Apropos of nothing….we are grateful to the Sunday Times today for pointing out that today’s date, 02/02/2020 is the best international date palidrome for almost a thousand years, in fact since 11/11/1111. We are of course not at all sure Read more…