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FOMC removes « concern » but gives no new direction …

FOMC announcement

Fed drops reference to international concern, but maintains « strong » domestic growth w an undershooting on inflation.

This leaves door open for June hike, but market firmly believes in December….as most likely next hike..

Market sees no « direct reference » and feels vindicated on reluctant Fed….

Stocks small up, EUR/USD unchanged and bonds at high of the day…

FOMC removes concern but gives no new direction ... - article

(http://projects.wsj.com/fed-statement-tracker/)

 

 

 

OVERALL:

Big non-event but a confirmation that FOMC in no hurry to move

My call remains the US will flirt with recession this year – Saxo thinks there is 60% chance, which leads us to OVERWEIGHT 10y and 30 yr bonds..

I’m writing macro report this week outlining our 60% call on recession in US and a global slow-down which will mirror this low activity……

FOMC removes concern but gives no new direction ... - us global

 

FOMC removes concern but gives no new direction ... - trade ticket

Buy T-bond 30 years futures @ 162.00 with stop below 161 or more aggressively below 160…. we see test of NEW LOWS in yield driven by weak consumption, low inflation and a global economy slowing down.

 

Main calls remains:

  • Weaker US dollar (Vs. AUD, JPY and Gold/SilveR)
  • Outperformance in Gold & Silver
  • Value only in selected EM, energy & mining
  • UNDERweight equity on divergence/expensiveness – collapse in “leaders” like Apple
  • NEW CALL and POSITION – Overweight 30 YR US Fixed income…… 60% chance of recession

 

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