Equities | FX | 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.
An Update on Our Latest Trade Ideas
We summarise the latest updates on our trade ideas here, with links to the original analysis.
- John unwound his short semiconductor trade for an oversized profit. He is now considering when to turn long (vs S&P 500). He has also discussed whether he should continue to be short retailers.
- We believe USD/CNH will hit 7.50 by yearend. Our other biases remain unchanged across Asia (bearish INR, KRW and TWD, neutral SGD, and bullish THB).
- We turned neutral-bearish on bitcoin and neutral-bitcoin ethereum as oscillating on-chain/flow signals direct price action amid a poor macro backdrop.
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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.
An Update on Our Latest Trade Ideas
We summarise the latest updates on our trade ideas here, with links to the original analysis.
- John unwound his short semiconductor trade for an oversized profit. He is now considering when to turn long (vs S&P 500). He has also discussed whether he should continue to be short retailers.
- We believe USD/CNH will hit 7.50 by yearend. Our other biases remain unchanged across Asia (bearish INR, KRW and TWD, neutral SGD, and bullish THB).
- We turned neutral-bearish on bitcoin and neutral-bitcoin ethereum as oscillating on-chain/flow signals direct price action amid a poor macro backdrop.
Bilal’s Asset Allocation Update
Find Bilal’s latest asset allocation biases here.
- We continue to advocate our ‘everything breaks’ portfolio. The core rationale is that we are entering a new regime of higher interest rates – something investors have not faced for decade. And with inflation expected to average over 6% across the UK and Spain, 5.5% in Germany, and 4.5% in the US, it is hard to see why central banks would be willing to end their hiking cycles anytime soon.
- With this backdrop, we continue to like to be overweight cash. Elsewhere, we think most assets will underperform, whether equities, bonds, property or crypto. That is why we continue to be underweight or neutral on these asset classes.
- The wildcard are commodities – the medium-term picture is bullish energy, but recession worries are near-term bearish. For now, we remain neutral commodities.
John Tierney’s US Equity ETF Biases
Find John’s full list of ETF biases here. Alternatively, they are in the table below.
- Since he launched his new framework, John has unwound his short semiconductor trade for an oversized profit. Looking forward, John has begun to look for opportunities to go long semiconductors, though has noted he might be slightly early. He has also discussed whether he should continue to be short retailer (XRT) vs long S&P 500.
- John previously launched a new framework! His methodology remained the same, but he now tracks his performance (relative to the S&P 500). In doing so, he presents trades in long/short format rather than over/underweight or marketweight.
Henry’s European ETF Biases
Henry made this call back in March. The premise still holds, and we review short-term adjustments periodically.
- Long-term overweight renewable energy (FAN, INRG): The EU remains hugely exposed to Russian energy – not just in gas but nearly all fossil fuels. It means that simply replacing the supply of Russian gas energy with other sources may be practically difficult (due to infrastructure) as well as geopolitically unattractive. Longer term, a concerted increase in renewables spend is highly likely.
- Paring overweight financials exposure. European stocks have faced substantial volatility as of late, from Russian gas supply, ECB policy, and Italian politics. It has meant we have pared exposure to the financial sector. Long term, however, we see strategic value in overweighting financials (CB5).
Cryptocurrency Models
Find our latest bitcoin signals here and our latest ethereum signals here.
- We are neutral-bearish bitcoinover the next two to four weeks. On-chain/flow signals no longer bullish while the macro backdrop remains poor for the cryptocurrency.
- We are neutral-bullish ethereumover the next two to four weeks. Much like bitcoin, on-chain/flow signs are not longer supportive of the cryptocurrency while the macro backdrop remains poor.
Discretionary Macro
Our latest discretionary macro biases in collaboration with SGX can be found here (FX) and here (Commodities and China Growth Tracker) while our latest views on rates in collaboration with TMX can be found here. We also examine investor positioning with CME here.
- In our latest SGX Asia Currencies Insights update,we reiterated our view to be bullish USD/CNH – we target 7.50 by yearend. Elsewhere, we continue to be bearish on INR, KRW and TWD, neutral SGD, and bullish THB.
- In our latest SGX Commodities Insights and China Growth Tracker update, we turned bearish on iron ore following China’s Party Congress. Meanwhile, inventories are well stocked, supply could continue to exert downward pressure on prices.
- In our latest TMX piece, we are bullish Canadian rates (two- and 10-year) and bearish US rates (two- and 10-year). This is because we think the Fed will end up hiking more than the Bank of Canada, an opposing view to the market, while Canadian housing is more vulnerable than US housing.
- In our latest CME FX update, we are bearish GBP and think most of the UK optimism has peaked.
Ben Ford is a Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.