DM rates // FX. Opinions my own and do not reflect my employer's position.
Hong Kong
Joined June 2015
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Stephen Spratt retweeted
Australia’s 60 minutes has released a preview of this Sunday’s interview with RBA Assistant Governor (Economic) Sarah Hunter. The interview was pre-recorded on 21 October 2026.
The programme is titled “Rate rise reckoning”. #AusPol for @Scutty
youtube.com/watch?v=EcFDIx0z…
Stephen Spratt retweeted
Which is another way to say that the Fed isn't anticipated to do enough to meaningfully slow economic activity.
Once the RBA hikes, it will be 6x G10 rate hikes in Sept.
Outliers hinge mostly on one thing:
"It's going to get harder to maintain that stance the longer we have high energy prices," BoE's Bailey, 25 Sept.
BoC's Macklem echoed this view on 2 Sept.
Stephen Spratt retweeted
The Fed has overstated its role in achieving price stability and understated the role of globalization in creating elastic supply. In effect, the Fed had it easy for more that two decades, and that lulled it into a false sense of confidence
Eurozone PMI hits 41 month high. This series is still one of the best forward indicators for Euro Area growth.
Growth outlook in tact = hike outlook in tact
pmi.spglobal.com/Public/Home…
Stephen Spratt retweeted
One of the street's fav trades paying off. 5y swap spreads at the widest level since earlier this year
Stephen Spratt retweeted
“A Japanese government official said that if Japan did not deliver the rate hike being sought by the United States, the issue could develop into a diplomatic problem.”
mainichi.jp/articles/2026091…
Stephen Spratt retweeted
Had dinner with a very smart CIO recently everyone and their mother is in this trade.
BIS review says as bonds have become "cheap" vs swap, RV funds have been happy to step in.
US Treasury ASW longs (long bond vs swap) have risen from $100bn to $300bn in the past year.
bis.org/publications/yields-…
BIS review says as bonds have become "cheap" vs swap, RV funds have been happy to step in.
US Treasury ASW longs (long bond vs swap) have risen from $100bn to $300bn in the past year.
bis.org/publications/yields-…
Latest Macro Hive conversation with @jturek18 was a great listen, always gets you thinking.
open.spotify.com/episode/7c9…
This line really punctuates the various interventions the Treasury has taken so far:
"The best-managed crisiș is the one that never happens."
In her latest sciolistic letter to me, @SenWarren made it clear that she knows even less about foreign exchange markets than she does about banking.
What is equally shocking, but not surprising: not a single member of the media mob has a rudimentary-enough level of financial market literacy to spot her remedial error.
To reiterate: under @POTUS, the United States delivers for America’s trusted partners.
For a fuller explanation, I recommend Senator Warren take any entry level course in international finance for her and her staff, or I can personally give her a tutorial on Foreign Exchange for Dummies. Although I am not holding my breath, I hope her next letter will demonstrate that she has learned the difference between a currency purchase and a swap or a loan.
Stephen Spratt retweeted
*BREAKING: Bondistan is opening its borders on 15th September to celebrate Lehman Collapse Day and you're invited to get your visas ready!
The Ultimate Guide to Bondistan 2nd Edition is coming to print!
Do me a favour and spread the word!
More details to follow.
Stephen Spratt retweeted
Whatever you think about this yield curve operation from Bessent, it is not QE. No reserves are being created. The good news is anyone trying to call it QE is basically confessing that they don’t understand anything about this issue area and can be crossed off your list of people to listen to.
Another shock to come in this new world of rolling shocks then... next up: food prices
🇪🇺 #ECB CHIEF ECONOMIST PHILIP LANE SPEAKS ON IRELAND'S RTE - BBG
*LANE: INFLATION TO HOVER AROUND 3% LEVEL FOR REST OF YEAR
*LANE: REALLY UNCERTAIN SITUATION
*LANE: INFLATION DEPENDS ON ENERGY PRICES
*LANE: RIGHT NOW FOOD INFLATION IS RELATIVELY LOW
*LANE: WEATHER EVENTS CREATE UPWARD PRESSURE ON INFLATION
*LANE: WEATHER EVENTS TO BE SEEN MOSTLY IN 2027
*LANE: FOOD INFLATION TO BE A KEY INFLATION DRIVER IN 2027
*LANE: EUROPEAN ECONOMY IS GROWING
*LANE: EUROPEAN ECONOMIC GROWTH NOT TOO BAD
Stephen Spratt retweeted
The biggest issue facing yen right now is that there isn't enough incentive for japanese investors to repatriate funds to its domestic market. Despite the massive AI trade that has lifted its equity market, Japan's CA surplus remains extraordinarily high due to its foreign holdings that continue recycling into foreign assets - aka the Primary Income component. The 3M avgs show just how much.
As much as the recent trade deficit has contributed to lowering it, that in itself is at the mercy of the yen, whose weakness continues to drive both the trade deficit and CA surplus .
Even though flows to USTs have lightened as UST performance has soured, the yen has remained hostage to rate differentials where JGBs yields are the hands weighed down by the seat of the BOJ.
Promises to change are simply the sounds of "pew pew pew" in a kinetic war a thousand yards from the frontline. Interventions, especially conducted in a vacuum are ending up a joke and the market is currently laughing.
Stephen Spratt retweeted
Excited to read this next as I thought his book Range was full of exceptional stories and its central thesis about breadth felt right.
1/ I just finished one of the best books I've EVER read.
Comes out next week.
My friend @DavidEpstein (Range, The Sports Gene) has written a masterpiece on the virtue of constraints, of not thinking OUTSIDE the box but "INSIDE the BOX"...
As a few quick excerpts that 🤯...
