Macro Digest - Final verdict: Ouch.... one more re-test of low likely into Jackson Hole and then FED Sept. meeting

Market was betting on Fed Atlanta's Lockhart to come to the rescue but he merely restated that a hike in 2015 is very much on the cards:

 

https://www.frbatlanta.org/news/speeches/2015/0824-lockhart?d=1&s=tw

 

Here is my basic Macro call as per pm note:

 

Today's earlier updates:

 

The US Dollar is leading this move: https://www.tradingfloor.com/posts/macro-digest-usd-your-main-catalyst-6032712

 

Targets reached in equity markets: https://www.tradingfloor.com/posts/macro-while-panic-is-sneaking-into-market-note-this-we-have-reached-all-of-our-targets-today-6045637

 

The basic premises underlying my calls:

 

1.)    Market price action dictates direction – traditional support levels was broken violently. Today market was the MOST ENERGIZED sell-off since 2008/2009.

2.)    The US$ lead this crisis and will lead back up when low is in….

3.)    We have reached most of my technical targets and below is my primitive "expected" path from here. (2015 low getting established)

4.)    We will see recession by H1-2016 combined with lows in all cycles – this past week was a "starter" to a bigger menu post FED (Sep/Dec or not at all)

5.)    Fed should move in September, failing to do so could delay FED all the way to 2017 based on 4.)  (Fed is now 24% likely to move acc. to market down from 50% one-week ago). The reason they "should" move is that the market and economy need a higher nominal "clearing yield" to get going again, but more on that later this week.

 

 

Here is the most important Tweets I have seen tonight:  All of them can be found in my Tweeter feed:

 

https://twitter.com/Steen_Jakobsen

 

 

Bullish percentage at extreme lows…

 

 

 

And now add 566 points for Aug 24^th…..

 

 

 

 

Net changes since China devalued ------

 

 

 

 

Jackson Hole now KEY EVENT….

 

Stanley Fischer is speaking … will he last minute change his speech as Draghi did last year – doubt it…..

 

 

 

The sheer magnitude for everyone to see (& understand)

 

 

 

Illustrations of how IMPORTANT net changes YoY in oil prices are for business cycles….

 

 

 

 

 

Fed probability to hike…. 20% down from 50% one week ago:

 

 

 

 

 

 

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

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
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