Credit spreads narrowing? Emerging market implied vol collapsing? VIX compression prompting systematic buying? Concoda must question the bear thesis. Leading indicators, however, are coming in soft...
This week, as bank reserves declined towards the $3 trillion mark, we witnessed a huge spike in the Fed's RRP due to regulatory arbitrage. With RRP paying less then SOFR, RRP rate could fall further..
In case you missed it… One of the Fed’s governors has suggested the Fed-implied point of instability when it comes to reserve balances ($2-$2.5 billion) has a lot more wiggle room. Governor Waller suggests two significant changes to the Fed’s QT framework that effectively
As we've broken through the coveted 3750-3890 range, our SM shows it's a coinflip for major U.S. indices. But we're macro bears, and options imply high vol and more downside (before CPI and Powell!)
SOFR fails to climb above the ON/RRP rate, which likely won't tempt leveraged bond financiers. Yet, the RRP's level has reached short-term lows. Other players are drawing liquidity...
Risk is to the downside on equities, but expect buying from vol strategies after implied was crushed yesterday. Vol will likely rally into the most crucial day of our lives, until next month's CPI!
As the transitory goldilocks economy emerges, there's little tightening in money markets. Reserves up by almost 9% and TGA down by 10%. Meanwhile, bond liquidity and trading volumes remain ample...
After awful economic fundamentals coincide with decent liquidity fundamentals, we remain short. Our growth model keeps falling while our SM is approaching max bullishness. Onwards and... downwards
Concoda is reluctant to chase and still thinks the rally has been driven by liquidity and structural forces over fundamentals. We're sticking with interest-yielding cash for now
