Weekly Notes 2021/07/26

OVERVIEW

Last week I was developing a strong view of a potential near-term top and stayed long USD and short on reflation from the previous week. This soon changed after the massive Tuesday recovery in US equities, to which I held on to my view much too long and left a tonne of profits on the table. Nonetheless I hit the reset, banked off what remained, and initiated short $EURNOK $USDMXN on Wednesday and long Russell AUDUSD AUDJPY upon seeing 5y breakeven inflation continuing to move back up on Friday.

EQUITIES

COMMODITIES

RATES

Global long-end yields have been coming down and curves flattening last week. Long USD, duration, and techs would be the prevailing theme but we are see potential signs of a turn from the wk/wk price action while 5yr breakeven inflation continuing to move back up.

FOREX

Views are generally centred around yields to start picking up this week, but I would be cautious later as I do expect Nasdaq (looking to be tactically short) to pullback after tech earnings which could potentially upset broader sentiment when it does.

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