Macro Thoughts’ review of 2018 and expectations for 2019 - To Xi or not to Xi, that was the question
For the fifth consecutive year, Macro Thoughts has produced double-digit returns for its clients in 2018.
6 months ago…(June 2018) Macro Thoughts released its half year review, including trade strategies, with YTD returns in double digit to portfolio…
- Buy GBPUSD 1.32, Sell 1.42
- Buy GBPAUD 1.72, Sell 1.82
- Sell EURUSD 1.24, Buy 1.17, 1.15 & 1.12
- Buy USDCHN 1.42, Sell 1.60
- Tactically trading EM currencies
- Various Volatility strategies in TY$ & Bund Future options, (as well as VIX Volatility ahead of February’s Volatility spike that saw the Dow Index drop 1300pts)
- US STIR VOL versus EURIBOR VOL mid-curve RV
- Tactically receiving US 10yr Treasuries on various occasions, including at 3.08%, 2.95% & 2.88%, achieving 13bp each time
- Trading the Bund 10 year yield range that started in 2016
- Widening Investment Grade Bond spreads versus High Yield (consider reversing)
- Long FRA & ESP 10 year bonds versus ITL
- Sell WTI OIL $65, Buy $60
- Sell Greek 10yr 3.75% on spread, Buy at 4.25%
Macro Thoughts recommended fading rate hikes in Canada and to price for potential rate cuts in Australia, (Buying AUD 10 years at 2.73%, targeting 2.35%, 2.25% & 2%).
In October, with WTI trading up to circa $75, this triggered our prediction that oil would eventually fall from $73.50 to below $50, ultimately targeting $45. With the fall of oil prices, inflation expectations were expected to be lowered. Macro thoughts recommended buying 10 year Inflation Swaps/ Breakevens.
Macro Thoughts has favoured being long of the 5 to 7 year part of the US curve, especially as the 5 year (FV$) Call skew was so steep, encouraging Volatility strategies, as well as long duration. From 3.05%, 2.75% and 2.50% have been targeted. On a break of 2.50%, yields could fall to 2.125%.
A fall in German yields was anticipated from 0.42%, targeting 0.25% and 0.05%.
Macro Thoughts Ltd
Since 2012, top tier global Hedge, Pension, Investment and Insurance Fund managers, as well as corporates and private individuals, have benefited from Macro Thoughts’ proven insight, market commentary, hedging, and investment strategies to leverage opportunities, with positive returns on over 75% of strategies, producing double digit returns for our clients over consecutive years.
Macro Thoughts is independently researched and draws on extensive macroeconomic and market experience gained in Fixed Income, Futures, Derivatives, Bond, Forex, Commodity and Equity Index markets and from strong Global Macro investment, risk taking and strategy backgrounds. Far-reaching product knowledge across asset classes enables us to consider hedging and investment strategies that reflect our expected market trends. Macro Thoughts is directed by Keith Grindlay, whose experience spans, somewhat uniquely, both the buy and sell side, having managed trading and investment desks at top tier institutions, ensuring all strategies are evaluated for risk/reward and the optimal instrument(s) for best leveraging the strategy suggested are employed.
Globally recognised for strong analytical skills, aligned with a particular aptitude for anticipating global economic events ahead of the majority of commentators, Macro Thoughts’ independent fundamental economic research and analysis and resultant strategies have a track record that assures exceptional results, with a service that surpasses the model of bank-supplied, partisan research and stands out from the general contributions on platforms that your clients and peers already have access to. The support and value offered by Macro Thoughts, delivering written research and analysis, presentations and consulting services, is backed by decades of macroeconomic and market experience and can be tailored to your specific requirements.
Member of the Royal Economic Society & EuroIRP, the European Association of Independent Research Providers.
www.macrothoughts.co.uk
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