//Macro Recap April II

Macro Recap April II

By |2023-04-19T03:27:59+00:00April 19th, 2023|

[Original Author, by Nigel Ng]

Lots of data mainly in the form of bank earnings this coming week. This will be especially important as we see how the SVB saga unfolds, especially in regional banks. Key metrics to look out for are deposits, NIMs, and loan/credit loss provisions. According to data, most deposit flight has already been reversed, but it would be helpful to get confirmation from the individual banks. JPM and WFC reported last Friday and they were pretty strong, but it could have just been rotation from regionals to large banks.

PMIs have also been weakening, but services are still above 50, in growth territory. That will be another key metric deciding whether or not the cuts in 2023 need to be priced out. Til then, no news is good news and assuming no new developments I expect yields to peak soon and volatility to get crushed in the next 2 weeks. At this juncture it is not a bad idea to start accumulating USD shorts, especially against funders. Given the massive oil move due to coordinated cuts, any signs of weakness in the economy could also warrant oil shorts.