Opportunities in 2015

It is always a very difficult task to predict what will move markets one year forward, and some would go as far as saying it is futile and impossible. I kind of agree with this point of view, but in financial markets, everything is about probabilities, and understanding macro can tremendously help investors ‘predict’ what would be tomorrow’s most likely scenario. What macro analysis is telling me about the financial world for next year is all...

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Time And Cycles

Time-based economic forecasting is unfashionable. Until the mid-twentieth century, economists were sympathetic to the idea that business activity and prices fluctuate in regular cycles. The majority view today is that booms / busts reflect policy errors, market failures or supply-side shocks: cycles still occur but they are unpredictable. The behaviour of the global economy in recent years, however, is explicable in terms of the old fixed-length...

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How Is Barclays Positioning In FX, Equities & Other Markets Right Now?

    Barclays Capital's Global Asset Allocator team is out with a note outlining their positioning strategy in FX, equities, bonds, and other markets. The following are the key points in Barclays' note.  The threat of higher US inflation and yields in H2 calls for a more defensive portfolio. We go long US 30y breakeven inflation and are positioned for a back-up in US front-end yields. We are also long USD versus EUR, JPY...

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Dollar Index Breaking Through Long Term Support

We are experiencing a very important market event this month, as the US dollar is breaking through a significant long term support. Such a move, if sustained, is very important for market participants because the USD is one of the most important asset class in macroeconomics. I can give many reasons of the utmost importance dollar has in the global economy, like it being the world reserve currency, but it is not the subject of this article. In the...

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Time To Hedge Long-Term Core Equity Exposure

Major US equity indexes all entered in all-time high territory last year. That in itself was a very bullish indication, as it showed the past of least resistance still remains to the upside. Last month, everyone on twitter, financial newspapers, market news websites was celebrating the fifth year anniversary of the current bull market, and let’s face it, market sentiment seems very bullish today… maybe too complacent? To answer this question,...

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Cycles Within Cycles

Seeing how investors psychology affect all security prices through the boom/burst cycle of optimism and fear, technical analysts are devoting an entire field using cycles theory to predict this repeated pattern. Similar to natural scientists, they identify reliable temporal patterns and cycles that have stood the test of time. I would like to review those cycles in this article, but first I need to warn that this analysis is not something to depend...

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