MT GLOBAL MARKETS Momentum & Sentiment Recap as of 24Apr20 wk17 thread 1/n

• WAITING FOR GODOT

• obviously <the> story of the week was CL & USO
• Macro data tanked as expected
• RiskOFF wk, credits weaker, stocks touch lower, vola tho coming down, Bonds/Gold up, BRL smacked

2/n there were plenty of charts all week even from me, but just to recap this historic event of Crude oil...

NO FUCKING BID...

it wasn't USO roll, but stops after stops after new stops and rumours that USO collapsed

but first: stop-loss-chain-reaction to -$40 ... WTF

3/n $USO actually wasn't involved in that carnage roll, they did it before.

This here is the latest snapshot, 20/40/20/20 which used to be 80/20. They already pay for storage , instead of pain for roll, same thing. And they did the 8for1 reverse split to make it look better...

4/n I thought they changed their strategy , but it turned out the regulators and CME ordered them ! Where would any market be without regulations, huh ? FED doesn't buy USO, but where would LQD,JNK,SPY be without regulators ? https://www.bloomberg.com/news/articles/2020-04-24/us-oil-fund-says-cme-has-ordered-it-to-limit-futures-positions?sref=NGSWM1DG

5/n anyways, storage problem with the ongoing demand & supply shock won't last forever. Steep contango now, but demand will come back H2, and Suadi will cut output ahead of next OPEC meeting.

Oil is the largest component of any weighted commodity index. For now, it's one-way.

6/n thats the same index last 25 years. Needs to find a bottom soon to mirror a global recovery story hint.

7/n talking about inflation / rates themes ... the long TNotes / short BTPs had a good run second wave. Sensitive given the nature of Italy's pre-COVID debt problem and negotiations with the EU. But then, obviously ECB usually steps in to buy large chunks, so: careful!

8/n and they got away with a downgrade from S&P, kept the BBB neg outlook, whereas Portugal (BBBs) and Greece (BB-s) got a semi downgrade.

doesn't matter for ECB tho, they take Greece junk rated govvies as collateral.

9/n update on global 10Y govvies and "Club Med Bonds" how we used to call them, hit 3M yield high.

[again , luckily ECB is supportive, imagine if not ]

10/n well well.. .oh not so well... flash PMI data was of course weak given the COVID situation, and services sector especially... they are now in low 10s... I mean, France 10.4 ! mon dieu !

also, Mexico, Russia, Turkey and China with another round of rate cuts.

11/n charts all look the same right now... straight down to the floor

here: last week's Services PMIs, chart shows Eurozone.

12/n ...or UK Consumer Confidence...

13/n ... Belgium NBB

14/n ... Germany IFO (all three hit all time low)

Current 79.5
Sentiment 74.3
Expectations 69.4

15/n German IFO does not lead US ISM, but correlation is high...

16/n ...regional Kansas FED already plunged to -62 ... ISM next week ?

17/n before ISM comes up, Chicago PMI reports... here is KC FED vs Chicago ... buckle up were are not only in Kansas anymore.

18/n ...because if Chicago PMI goes, so will ISM... thats the highest correlation between regionals.

19/n ...weak manufacturing, weak services sector... lockdown, economic standstill, unemployment soars like never seen before...

here comes the US consumer confidence , the "backbone" of the US economy.

Current 74.3 (103.7)
Sentiment 71.8 (84.1)
Expectations 7.1 (79.7)

20/n quick overview of next week survey data in Europe and US...

21/n surprisingly good numbers from ZEW survey... which is not real business books, but financial analysts.

Current dropped to -91.5
Expectations rose to +28.2

For a change I took a sum of both and indeed, 2003, 2009 marked the bottom.

22/n last chart was vs DE10Y YoY, here vs DAX YoY...

Financial analysts believe, the bottom is already behind. DAX never plunged to where it could have, thx to SPX correlation and global fiscal/monetary super bazookas.

(by the way, I think they need to double that)

23/n US jobless claims again horrific, yet, less than before and before that.

deffo a chartcrime overlay contender, but come on, to good to pass. Jobless claims "lagging" VIX shock and will come further down. ;-)

24/n ye ol' tongue-in-cheek MRI Macro Risk Indicator including flash PMI, Uni of Michigan consumer confidence etc... made it to 41.9

obviously COVID-related sharpest drop since decades. but stonks holding up because of largest ever QQE program,they even buy downgraded junk bonds

25/n oh no, not another stupid overlay ... yes. here it is: MT MRI YoY vs SPX YoY.

It worked until ... the fattest lady sang

26/n credit indices going nowhere, bit wider in the week, but not tightening as one could expect given the monster QQE.

27/n not much to report with CDX YoY vs SPX YoY comparison.

quo vadis ?

28/n oh, I forgot, Global Markets snapshot YTD as of wk17

29/n and Momentum/Trend/Exhaustion table wk17

30/n USDBRL...

chaos in Brazil ? US$ funding, oil crash, COVID, police chief fired, cabinet members resign...

31/end

"In the end everything will be ok. If it's not ok, it is not the end yet."

enjoy the rest of the SUNday.

bless and good buy or good bye

x

@threadreaderapp unroll