Global Macro Act I now for Act II

The market has already traded the other side of the energy shock. The problem is that it still has not seen enough to know whether it is pricing repair or simply celebrating survival.

That distinction matters. I do not think the overnight move was irrational. It was the correct first-order response to the removal of an acute tail. Oil collapsed, front-end rates rallied, the dollar backed off, equities ripped, small caps caught a bid, and Europe outperformed. If you remove the most obvious inflationary supply-risk from the distribution, that is exactly how markets should behave. The mistake would be to look at that cross-asset move and conclude that the system has therefore returned to something close to normal.

That is not what has been proven.

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