20211122 Weekly note

4 min readNov 22, 2021

Late one today… The business venture I’ve partnered into has hit quite a few snags and is drawing all of my attention and patience at the moment!!


Most currencies were weaker against USD apart from GBP (strongest last week), while JPY benefited from global yields retreating. Crude down more than 10% off the highs! Defensive theme evident in futures (e.g. NQ ZB) as sentiment has soured due to potentially more lockdowns and disruptions through the festive season.


MSCI World has had its first bearish week in 7 weeks with investor sentiment (AAII) on the turn from recent extremes…

New lows in the US Value/Growth ratio…

Risk premiums trending out higher lows since the September dip. Downside protection would start to appear expensive above current levels, increasing risks of pullbacks.


Widening USD rate differentials — not hard to see why DXY has been well supported looking at US (top) and German (bottom) yield curves; Orange — last week change, Purple — prior week change.

Eurodollar 2023H1 spread retreating slightly but essentially unchanged with markets still looking at ~3hikes next year.

Real yields (top panel) have been coming off the lows while inflation expectations (bottom) have calmed over the past week. I expect it to moderate around these levels going forward.


CRB Commodities index has been consolidating so far this month and looks as though there could be more weakness, fitting in with the near-term outlook of weaker appetite and strong USD.

Crude fairly stretched imo and I’m still mildly bullish Crude bigger picture wise as I’m doubtful OPEC would be so eager to ramp up production so quickly.

As strong as the Precious Metals looked last week, I said I would be squaring up most of my Silver while at major resistance, and happy I did on the Monday. My reasoning was that inflation expectations wouldn’t move much higher and therefore limit downside in real yields, and also if real yields do recover slightly it could further support the already strong USD demand as an extra headwind for PMs. Gold looks vulnerable based on Real yield chart above, while there are strong technical reasons to support last week’s pivot and a further retracement of the MTD rally. I would not expect a bullish breakthrough for PM’s for the time being.


With markets looking particularly vulnerable at the moment, I’m getting mildly bearish, from Neutral last week and mildly bullish the week before that. Long duration short cyclical theme looks like it could easily dominate the next few weeks and will be my preference for the short term book. For the longer term I like Oil on dips and still very much like AUDCAD short as a trade with strong potential to perform into next year.

Recent support has been bombarded numerous times this month and its looking like it could easily expose the next range lower, and bouts of risk-off tends to push this pair lower also.

Have a great week trading!