Weekly Report | USD Up, Gold Crowded, Bonds Cheap
Here’s the topics & takeaways from my latest report —it provides some high-level insights into how I am currently seeing Macro & Markets:
1. USD: continue to watch for short/medium-term upside risk in the US dollar as technicals, sentiment, positioning turn up, policy pivots, and geopolitical risks loom.
2. Gold: gold technicals have flipped to bullish (from previous bearish), but a number of downside risk flags remain (expensive valuations, crowded positioning, consensus bullish sentiment).
3. Treasuries: compelling contrarian bullish setup in bonds (cheap valuations, bearish sentiment, very low allocations/positioning, high risk perceptions), but still awaiting the macro/technical confirmation.
4. Risk Tables: overall there are plenty of strong and credible upside risks for growth/risk-assets, but there is a slight skew to downside risks, particularly around geopolitics, inflation, rates.
5. TAA Review: continue to favor growth assets (but with nuance: neutral equities, over commodities and REITs), funding by underweight to cash (mild bullish on bonds).
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