OVERALL:
Our major allocation shift is working on fixed income, but commodities and Gold still needs the all clear from the Fed hike….
This is the "headlines" for my strategy change and link to May 18th article:
We need to stop talking deflation and using 1930s comparison on FED hike:
REAL rates finally coming off in the US: Positive Gold and negative US$?
Wow – inflation expectations is rising and fast….
European "cost advantage" is disappearing fast and furious – enjoy the summer of growth – behind comes: zero growth, zero reform and higher inflation "expectations"…..
Excuse me? Didn't ECB start QE – in world of madness hard even to see change in ECB balance sheet…. Japan is just not real, for that matter nothing is!
Poorly constructed chart… but clearly… CREDIT cycle has peaked……
Compare this to COMMODITY cycle:
AND just to remind you… WHEN FED hikes it's a MARGIN CALL – there are NO basis in their mandate to do so, but their need to normalize will have data support over summer as CESI (Citi Surprise Index will mean revert)
I have been travelling like a mad man: France, UK, Croatia, Slovenia, Slovakia, Kazakhstan, Singapore, Hong Kong, Slovenia, Hungary, Czech and Netherland…. And next few weeks: London (CNBC guest hosting Friday), Switzerland, China and Japan… but I got PLENTY to report….. teasers:
CEE is the canary in the coal mine for QE, mining is underowned and underpriced, inflation is coming back, Silk Road is for real, autocratic government in for hard time across Europe…and still unfortunately: NO REFORMS anywhere, but great clients, risk takers and media……
Safe travels….
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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