Macro Man is back.....sort of. A misadventure in setting his alarm last night left him sleeping in, working from home as a result, and...well....still a little groggy.
Suffice to say that it was one of the more uneventful summer holidays, market-wise, that he could recall. Oh, sure, there was a bit of noise either side of payrolls (and OK, he did trade a fair amount on payroll day itself), but there were no real bombs, either of the literal or market type.
Given last week's roller-coaster ride, Macro Man wonders what sort of state the psyches (and P/Ls) of market punters may be in. The comments section in this space gave him some idea...but erratic price action usually does not spell "fun and fortune" for most directional players.
Anyhow, he's back now and open for business in the commerce of new ideas....or the revival of old ones. As frequent commenter Nemo has pointed out, Shanghai's turned pig-ugly during your author's absence.
If sustained and indeed extended, that should bode relatively ill for both equities and all things EM, the latter of which has served as Macro Man's "risk-on" nexus for the past month or so.
From his perch, the rally in short ends looks pretty extended, and while there's more room for upside further out yield curves, there's still the elephant-in-the-room of pesky supply considerations.
Technically the euro looks pretty poor, which is a tad ironic given Germany and France's much-ballyhooed exodus from recession. While it's tempting to slot it, bitter experience has taught Macro Man not to get too excited about potential technical breaks in the euro, particularly when swimming in CB-infested waters.
No, from where Macro Man sits, the trade that seems most compelling is one that is painfully familiar. He had a decent run during his time off....time to spend some of that P/L on developed-market equity index puts.