All Macro-Thematic Trend Reports:

G7 Leaders support an economic suicide pact; FX replacing credit spreads as a leading indicator of risk (FFTT, 5/11/22)

We commit to phase out our dependency on Russian energy, including by phasing out or banning the import of Russian oil.  We will ensure that we do so in a timely and orderly fashion.-G7 Leaders’ Statement, 5/8/22 We will make sure that we phase out Russian oil in an orderly fashion, in a way that allows us and our partners to secure alternative supply routes and minimizes the impact on global markets.  This is why we

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The 10 Most Interesting Things We’ve Read Recently (FFTT, 5/6/22)

“US Treasury quietly aiming at DXY index at 110+ by summer, hoping foreigners will buy US stocks to avoid a crash” (Page 2) “I understand what the Fed is doing and I understand why they are doing it, but it is not going to work.” (Page 5) “Stress emerges again in UST market” (Page 8) “Japan may spend $100 billion to slow JPY’s slide, Bank of America says” (Page 9) “Distressed debt levels double in

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US Treasury takes a baby step toward YCC, as 10y UST real yields turn positive (which is a big problem) (FFTT, 5/4/22)

…our view is that the key to the Fed normalizing policy will be getting US debt/GDP back down to a level that will allow a normalization of policy without blowing up the US government or the markets.  In our view, the US debt/GDP level that would allow such a normalization of policy would be 70-80%, as 70-80% was where it was the last time the US tried to normalize policy in 2014-2017. With US debt/GDP

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The 10 Most Interesting Things We’ve Read Recently (FFTT, 4/29/22)

“BIDEN SAYS NOT CONCERNED ABOUT A RECESSION AFTER GDP DATA” (Page 2) US “60/40 portfolio” down quarter/quarter nearly as much as it was in March 2020 (Page 4) One measure of UST volatility is nearing March 2020 levels (Page 6) US stocks reached levels this week that have elicited rapid Fed responses in the past (Page 8) US government plans to borrow 85% of estimated global GDP growth in 2022 – so far, it’s not

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Why we think the Fed will stop tightening by the end of 3q22 (FFTT, 4/27/22)

The most worrying part about this USD move is that it is not obvious what the circuit breaker is. In the 2010s, this level in the USD index would alter Fed policy intentions. This time around, even at these levels in the USD, we’re still very far from that happening.–Jon Turek, JST Advisors, via Twitter, 4/26/22 A surprisingly large % of US income tax receipts are tied to a rise in US stock prices.  When

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The 10 Most Interesting Things We’ve Read Recently (FFTT, 4/22/22)

“If tasked with collapsing global bond markets & economies as quickly as possible, I’d do what policymakers have done in the last 8 weeks” (Page 2) “Weaker JPY, costly oil push Japan’s trade deficit higher” (Page 3) The JPY and UST yields have become tied at the hip (Page 5) “Biggest Investment Grade bond selloff on record while IG credit spreads remain subdued – is all about duration” (Page 8) “Big US banks get a

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