Editor's Note: Falling U.S. inflation has been hitting markets for much of 2017. The Energy sector (XLE) is down -16% year-to-date. Fortuitously, we call this (i.e. Reflation's Rollover). Below is a brief update on our Reflation's Rollover call via Hedgeye CEO Keith McCullough in today's Early Look.
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One of the most important ways we try to help you is by contextualizing immediate-term (weekly) market moves within the context of intermediate-term (3 months or more) macro TRENDS.
From a FICC (Fixed Income, Commodities, and Currencies) perspective, here are 10 callouts from last week:
- US Dollar Index Down (on Dovish Fed) -0.7% to -9.3% YTD
- EUR/USD +1.4% on the week to +13.4% YTD
- Yen (vs. USD) -0.1% on the week to +7.0% YTD
- Commodities (CRB Index) +0.2% on the week to -7.6% YTD
- Oil (WTI) -1.6% on the week to -16.1% YTD
- Gold +0.5% on the week to +11.3% YTD
- Copper +3.2% on the week to +21.0% YTD
- Corn -3.3% on the week to -7.0% YTD
- Hogs -4.6% on the week to -3.7% YTD
- UST 10yr Yield -3 basis points on the week to 2.17% (-28bps YTD)
In summary, those 10 moves = 2 words (Reflation’s Rollover). Dollar Down, Rates Down, Dovish Fed – that’s not a debate anymore. It’s macro consensus that remains right.
