The Macro Trading Floor Alfonso Peccatiello & Brent Donnelly

A big macro week is behind us: the combination of CPI and PPI releases provide us with solid information on where the disinflation trend stands. Alf and Brent also discuss Powell’s press conference + change in dots and the European political risks.

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Alf and Brent discuss the ECB and Bank of Canada cuts, and reflect on the big bond market moves seen recently coupled with carry trade implosions. The discussion focuses around risk management principles to prevent bad left tail outcomes when running carry trades, and how to identify positive expected value trades in macro.

Alf is offering a 2-weeks free trial to his institutional research: ping Alfonso Peccatiello on Bloomberg to get in.

Brent just launched Spectra School: www.spectramarkets.com/school

Transcript of this episode: https://www.spectramarkets.com/tmtf-transcript-07-june-2024/

Paper about the real value of gold: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4807895

The Signing of the Boob: https://x.com/donnelly_brent/status/1798055339881107626

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In this podcast, Alf invites Peter Farac (aka @countdraghula on Twitter) to the show.
Peter brings a wealth of experience running money and has specific skills in rates and vol markets.
Alf and Peter discuss where the US business cycle actually is, how markets are positioned, and talk shop: how do we actually trade these markets?

Follow Peter @countdraghula on X, Free Newsletter: www.macroisdead.com

Want to meet Alf and Brent in person?! Fill in this 30-second survey so we can make this happen:
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In this episode, Alf and Brent discuss how markets are becoming quickly complacent with realized and implied volatility collapsing across asset classes.
The only surprises are still coming from bond markets, while something interesting is brewing in China which could have a meaningful impact for macro going forward.

Plus, they discuss the odds of a Trump win and its implications.

Useful link: https://polymarket.com/event/presidential-election-winner-2024
https://www.semafor.com/article/05/21/2024/imprisoned-ex-trump-aide-peter-navarro-predicts-ouster-of-fed-chair-jay-powell

(Links mentioned in the podcast are in the show notes below: check them out!)

Alf and Brent discuss the soft patch the US seems to be going through and the CPI number released this week. If markets are going to continue with this low-vol grind higher, how do you trade macro now? Also, China seems to be cooking something big this time.

- Contact me (Alfonso Peccatiello) on Bloomberg to check out the Crowded Trades Indicator

- Link to Bill Bishop piece on China: 
https://sinocism.com/p/putin-in-china-reactions-to-us-tariffs

- Link to the interview with Paul Tudor Jones: https://www.linkedin.com/posts/alfonso-peccatiello-72156a6a_paul-tudor-jones-market-wizards-activity-7196033190011060226-jDKp?utm_source=share&utm_medium=member_desktop

The Bank of England pre-announced a rate cut in June, the Swedish Riksbank cut interest rates, and there are a few early signs of weakness emerging in the US as well.
Is the market ready for a regime switch?
Alf and Brent also discuss how they approach trading into volatile events, breaking long-term correlation, and the structural USD strength.

Links mentioned in the show:
https://www.spectramarkets.com/amfx/cad-v-wti-divortium/
https://www.atlantafed.org/cqer/research/gdpnow#Tab3