
Bitcoin & Crypto | Economics & Growth | Global | Portfolio Updates
Bitcoin & Crypto | Economics & Growth | Global | Portfolio Updates
We consolidate our favourite biases into one, easy-to-read, weekly report! Please find the original pieces linked throughout and a summary table at the end of the document. Reach out to us on Slack or email the author with any questions about the content.
We are over halfway through January and our trades continue to hold up. You can find out more about our changes here:
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We consolidate our favourite biases into one, easy-to-read, weekly report! Please find the original pieces linked throughout and a summary table at the end of the document. Reach out to us on Slack or email the author with any questions about the content.
We are over halfway through January and our trades continue to hold up. You can find out more about our changes here:
You can read the entire piece here.
The current US dollar uptrend has lasted three years longer than the average – seven! Now, foreign investors are selling US equities while the market thinks the Fed is near the end of its hiking cycle. We think the dollar is in its endgame and could weaken 5% for three reasons:
Find Bilal’s latest asset allocation biases here.
2023 has started with a positive tone. Most risk markets, from equities to crypto, are up. Four themes are driving this:
The near-term downshift in inflation means we turn neutral on equities, until it turns out stickier than investors believe. On bonds, we are more cautious and remain underweight. Meanwhile, we turn overweight commodities partly due to risk-on and partly to gain tail-risk exposure in the right direction (that is, it hedges against the possibility of inflation returning). Lastly, we stay neutral on crypto and overweight on cash.
Find John’s full list of ETF biases here. Alternatively, they are in the table below.
John’s ETF model portfolio is up +0.4% since inception. His last update saw him unwind short positions in three European equity indices – Euro Stoxx 600 (SXXP), Euro Stoxx 50 (SX5E) and the FTSE 100 (UKX).
You can read the entire piece here.
John has released his 2023 equity outlook. He expects equities to trade in the range of the past six months for now, although the robust labour market and upcoming earnings season may provide a tailwind in the coming weeks. Further afield, he believes equities will exit that range – whether up or down – as it becomes clear whether the Fed has done enough to quell inflation. In short, he sees risks tilted to the downside.
You can read the entire piece here.
Before joining us at Macro Hive, John spent 30 years as a sell-side analyst covering structured finance and credit markets. He put his credit hat back on and produced his 2023 corporate bond outlook.
He thinks corporate bond spreads will widen significantly if, as we anticipate, persistent inflation leads to higher rates and a recession later this year. However, US companies are going into this likely scenario with exceptionally strong balance sheets. The surprise for many will be that default rates rise less than in previous recessions, and how quickly credit spreads recover. He thinks, for investors who can live with some volatility to be marketweight in investment grade and high yield corporate bonds.
Find our latest bitcoin signals here and our latest ethereum signals here.
Find our latest bitcoin signals here.
We are neutral-bearish bitcoin over the next two to four weeks. On-chain/flow signals are neutral while macro signals remain bearish.
Find our latest ethereum signals here.
We are bullish ethereum over the next two to four weeks. In short, a poor macro backdrop is unable to offset the very bullish on-chain/flow signals.
You can find our latest views on G10 FX here, in collaboration with CME. We also published a piece on CAD, in collaboration with TMX. You can read it here.
We are bearish USD. However, this does not mean it is an easy trade. It is prudent to find the best currency to pair it with. We expect commodity currencies, such as AUD, to perform well on the China re-opening, disagreeing with investors’ shorts in these currencies. Meanwhile, we are more neutral on the euro as the market could be premature in pricing Fed cuts. On the yen, we think there is a risk the BoJ could adjust its YCC policy again, so we lean ore positively on the currency.
There is one currency we believe that will underperform USD, however: the Canadian dollar. Before the December Bank of Canada meeting, we set our sights on USD/CAD returning to 1.45. For now, we remain bullish USD/CAD.
You can read our latest Asia FX biases, in collaboration with SGX, here.
Asia FX has had a strong start to the year with the rapid China re-opening and related policy support buoying risk appetite. A weaker dollar, alongside lower yields, but US equities broadly holding up, has also been a key support. We warn, the global backdrop is weakening, leaving risks ahead.
For now, we are bullish CNH, INR, KRW and THB.
John presents his view on iron ore to start the year. You can read it here.
The iron ore rally continued through the Christmas holidays as steel mills rebuilt stocks in anticipation of renewed building activity in the new year. John believes the rally faces several challenges, including China’s new iron ore buying consortium, rising Covid infections, and higher imports.
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