Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

The developments taking place on Copper and the wider London Metals Exchange Index, indicate further gains from here in base metals. The corrections over the past couple of months seem to be over and we might even be ready to rally back to the trend highs.Should that unfold, it would only bring inflationary pressures back to the fore and help push breakevens higher, which has already started to happen.Combining that with the recent trouble in Chinese equities &amp; the low nominal yields has resulted in the lowest ever print on US 10 year real yield today.Unless one believes nominal yields are going to shoot up quickly (not a belief held here even if there seems to be little value in Bonds) then this picture should continue to provide a positive backdrop for precious metals and a negative one for the USD generally.

The developments taking place on Copper and the wider London Metals Exchange Index, indicate further gains from here in base metals. The corrections over the past couple of months seem to be over and we might even be ready to rally back to the trend highs.Should that unfold, it would only bring inflationary pressures back to the fore and help push breakevens higher, which has already started to happen.Combining that with the recent trouble in Chinese equities &amp; the low nominal yields has resulted in the lowest ever print on US 10 year real yield today.Unless one believes nominal yields are going to shoot up quickly (not a belief held here even if there seems to be little value in Bonds) then this picture should continue to provide a positive backdrop for precious metals and a negative one for the USD generally.

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

The Chilean peso has given up its outperformance from earlier this year following the central bank's dovish hike. We remain constructive on the currency on the back of the market-friendly outcome of the presidential primaries last weekend, upward revisions to Chile's growth, the outlook for copper prices, and the possibility that the central bank raises rates faster than currently priced.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

The Chilean peso has given up its outperformance from earlier this year following the central bank's dovish hike. We remain constructive on the currency on the back of the market-friendly outcome of the presidential primaries last weekend, upward revisions to Chile's growth, the outlook for copper prices, and the possibility that the central bank raises rates faster than currently priced.Separately, the attached file is a snapshot of the EM currency market in which we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to an EM currency index.

FX Dashboard: Stay Bullish on the Chilean Peso

In a note titled <a href="https://www.smartkarma.com/insights/bonds-all-charts-lead-to-me" target="_blank" data-smartkarma-citation="insights:52482" rel="noopener">Bonds: All Charts Lead to Me</a> on 3 June 2021, it was suggested that US 30 year yield would make it to 1.90%-1.92% area.That target has now been met. However, fresh developments must be taken into account while trying to determine what happens next.

In a note titled Bonds: All Charts Lead to Me on 3 June 2021, it was suggested that US 30 year yield would make it to 1.90%-1.92% area.That target has now been met. However, fresh developments must be taken into account while trying to determine what happens next.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

In May we outlined a call to short metals for a big unwind in crowded positioning. Our weaker yield stance then called for crowded banks to be the next unwind and now see oil and then tech as the next domino's to fall.Key support breaks and pivot levels are outlined that will culminate in a late June risk off event that is gaining bear momentum today.USD bottom and rally call is unfolding and gaining bull steam.

In May we outlined a call to short metals for a big unwind in crowded positioning. Our weaker yield stance then called for crowded banks to be the next unwind and now see oil and then tech as the next domino's to fall.Key support breaks and pivot levels are outlined that will culminate in a late June risk off event that is gaining bear momentum today.USD bottom and rally call is unfolding and gaining bull steam.

Unwinding Crowded Trades - What Is the Next Domino?

The picture on the Dow Jones Industrials Average is unfolding in a manner that is still similar to that seen a year after the last major crisis almost a decade ago - and it is troublesome in the short run.One way or another, in whichever strange ways, history has a way of somehow reflecting it’s previous shades. A year after the lows, the stock market today is once again showing signs of short term vulnerability as it did in 2010, a year after the stock market low of March 2009.Perhaps the leading signs are seen on the Dow Transportation Average which has already declined notably since the first half of May. Any lower on either the Transports or the Industrials would amount to significant bearish breaks that would argue for 6%-9% declines from current levels depending on which average we choose to look at.Perhaps it was bad timing for the Fed to be hawkish this month. Or this is a reaction to the Fed’s hawkishness itself. Either way, should this bearish picture on the Dow, as well as the bearish ones in most commodity markets, unfold, expect the Fed to “back track” on some of its recent messages.

The picture on the Dow Jones Industrials Average is unfolding in a manner that is still similar to that seen a year after the last major crisis almost a decade ago - and it is troublesome in the short run.One way or another, in whichever strange ways, history has a way of somehow reflecting it’s previous shades. A year after the lows, the stock market today is once again showing signs of short term vulnerability as it did in 2010, a year after the stock market low of March 2009.Perhaps the leading signs are seen on the Dow Transportation Average which has already declined notably since the first half of May. Any lower on either the Transports or the Industrials would amount to significant bearish breaks that would argue for 6%-9% declines from current levels depending on which average we choose to look at.Perhaps it was bad timing for the Fed to be hawkish this month. Or this is a reaction to the Fed’s hawkishness itself. Either way, should this bearish picture on the Dow, as well as the bearish ones in most commodity markets, unfold, expect the Fed to “back track” on some of its recent messages.

United States

Copper is a chemical element with symbol Cu (from Latin: cuprum) and atomic number 29. It is a soft, malleable and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a reddish-orange color. It is used as a conductor of heat and electricity, as a building material and as a constituent of various metal alloys, such as Sterling silver used in jewelry, cupronickel used to make marine hardware and coins and constantan used in strain gauges and thermocouples for temperature measurement.

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Copper (COPPER COMDTY)

Bonds & Commodities - An Interesting Mix

Higher Base metals bring inflationary concerns. When combined with low nominal yields we are now at the lowest level on US 10Y real yield which...

Shyam Devani

FX Dashboard: Stay Bullish on the Chilean Peso

We remain constructive on the Chilean peso on the back of the market-friendly outcome of the presidential primaries last weekend and upward...

Gautam Jain, PhD, CFA

US 30 Year Yield: Target Met, What Next?

The 1.92% target on US 30 year yield has been met. However in the context of recent market developments, there still appears to be the danger of...

Shyam Devani

Unwinding Crowded Trades - What Is the Next Domino?

In May, we outlined a call to short metals for a big unwind in crowded positioning. Our weaker yield stance then called for crowded banks to be the...

Thomas Schroeder

US Equities: Dow Troubles

The Dow is in trouble whether looked at independently, with the Dow Transports, or taken from an historical trend perspective. Watch these levels...

Shyam Devani

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