Macro Chart Digest: If copper's right, we're in trouble

Dear All,

 

Probably final word from me this week (I know… TG) as I am off to London for guest hosting @ Squawk Box Europe on Thursday morning @ 8-10 CET

Then I am off to Brussels to speak @ http://leseconoclastes.fr/conference/ @ 17.30 @ Universite Catholique De Louvain la Neuve – UCL. A French think thank with journalists who is NOT mainstream J

 

Positioning:

Still 75% long fixed income in beta mainly US 10 and 30 Y notes and bonds.

Increasing risk to Gold –and will add Silver this week….

Short US energy banks + Austrian banks vs. insurance companies (European)

My momentum model is: (next update end of month)

Short Cocoa, long Sugar, short Crude, long USDCAD, long USDTRY.

 

 

Better link and resolution on this online link: https://www.tradingfloor.com/posts/macro-chart-digest-if-coppers-right-were-in-trouble-3413338

Macro Chart Digest: If copper's right, we're in trouble

 

·        If copper is right we're heading for a slowdown – big time

·        Swiss yield curve is negative through 12-yr maturities

·        The Chinese devaluation may already have started

·        Why there's no 'confidence' in US stock markets

 

By Steen Jakobsen

 

The first and most worrying chart in today's article is the price of copper, or as it's often called: the only commodity with a PhD in economics due to its excellent ability to predict future growth. The chart has copper leading growth by three months:

 

 

 

Now consider the nine-month lead-lag I always talk about between changes in market prices and their impact on the economy. Here's the oil price impact on growth, excellently charted by Barclays:

 

 Barclays also has a terrific chart to explain how price changes growth ....historically:

 

 

In FIXED income US, my biggest longs are looking good, but with more downside potential now in 10-year tenor than in the 30-year it seems. (30-year US bonds gave best risk adjusted return from any asset in 2014!)

 

 

and... the 10-year T-note:

 

Source: Stockcharts.com

 

In the equity space, pricing is out of control (as measured by standard deviations) but I learnt my lesson talking about DAX only last week "showing divergence" only to be blown out of the water.

 

 Source: Stockcharts.com

 

In the US  I have been a keen follower for a long time of a concept called T-Theory  by Terry Laundry and I have used its "Confidence Indicator" before. But what's interesting is how "confidence is low" while the market is still very close to all-time high... explanation here:

 

Source: Stockcharts.com

 

Finally two charts which caught my attention......

 

Print this chart – you'll only see this ONCE in a lifetime!

 

CHF yield curve is NEGATIVE through 12 -rs tenor!

 

 Source: Bloomberg 

 

China starting a "crawl" – CNY higher... it could seem that way...

 

 Source: Bloomberg

 

– Edited by Clare MacCarthy

 

Steen Jakobsen is chief economist and CIO at Saxo Bank

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

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