Antipodean Capital Macro Strategy Daily Jan 18 - Despite rising LT recession probability models, ST recession odds in the next 3-6mths remain near zero according to our models, as data hasn’t weakened enough yet to be alarmed. IP tonight.

Macro: US Recession Odds: We’ve used our Recession Matrix for the last 6 years to time the strength and turning points in the US cycle. Over that period it has been extremely helpful to us in a) staying long risk assets in the mid to late cycle phase, then b) trading the twists and turns in risk appetite over the last 4 years since late 2014. As the US cycle matures, recession probabilities are rising across most models, however we also employ a short term recession indicator to ascertain whether the US is at immediate, short term (ie. within 3-6mths) risk of recession. Our measure continues to suggest such a short term risk is not present, not yet anyway.

Summary: Markets in the US continued to rise, buoyed by still passable earnings reports even if with the odd notable miss (last night from Morgan Stanley, while most other banks have beat), a rebound in the Philly Fed PMI (from 9 to 17) against the run of recent data, and late reports, since denied, that the US is set to list tariffs on China. Yields rose and the USD passed time, though commodities were generally up.

New trades: None.
FX: Short $JPY at 107.50 risk 110. Long EUR$ at 1.1360 risk 1.1260 target 1.18. Short NZDJPY at 72 risk 75. Long JPYKRW at 9.85 risk 9.76 target 10.30
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s short NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Bought US 10’s at 2.91% risk 3.1% target 2.6%. Sold HYG at 83.55 risk 85 target 80.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Short US Banks Index at 93.25 risk 100 target 80. Stay short Dow Transports at 10375 risk 10800 target 8000. Bought Feb VIX at 20.2.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65. Long Silver 14.08 risk 13.85 target 14.80+. Bought Gold at 1243 risk 1230 target 1300.