We have talked over and over about supply during the past 12 months, but it is now time to talk about demand. Go short the business cycle and buy USD.
Great article with eye opening charts. Commodities correlating with all assets on sell off days have been happening and will probably continue. Especially when risk aversion gets combined with the falling China inputs. I like food and energy long term, but those assets will probably go on sale with everything else at some point.
Emerging market credit and fiscal crisis on the horizon alongside European economic weakness? I might broaden out from my emerging market equity short with some UUP.
Hi Andreas, I’m new to your sub stack, found this piece insightful and to the point. Clearly you have a granular and mechanical understanding of the markets. A question if I may: if as you suggest(which also appears to be a certainty) the FED starts to lift rates this summer, the impact on emerging market debt will be profound? Micro impact will force tax rises, when the economies are already battered post covid? Potentially more defaults moving from periphery towards the core?
As for USD shortages, I have heard there are already major usd shortages in Rwanda and Congo. Thanks