Trade Ideas
Without sounding like a crazy person, i want to make sure everyone is aware of the critical macroeconomic events for the coming week(s)
Friday 1st Nov - US - NFP
Tuesday 5th Nov - AU - RBA Meeting
Wednesday 6th Nov - US - Presidential Election
Wednesday 6th Nov - NZ - Labour Data
Thursday 7th Nov - GB - BOE Meeting
Thursday 7th Nov - US - FOMC Meeting
Friday 8th Nov - CA - Labour Data
Monday 11th Nov - NZ - Inflation Data
Thursday 14th Nov - AU - Labour Data
Thursday 14th Nov - US - CPI
Friday 15th Nov - US - PPI
Friday 15th Nov - US Retail Sales
You might wonder why New Zealand’s inflation data or Canadian and Australian labor data are relevant. In the current phase of global rate cuts, central banks are highly focused on labor markets—particularly employment and inflation—due to concerns over persistently high levels. Tracking these indicators in other economies can provide valuable insights into broader economic trends and will improve trade identification.
At the moment markets are witnessing unprecedented highs across multiple assets: stocks, speculative investments like Bitcoin, home prices, and gold, all at peak levels. National debt has soared, while core CPI inflation remains elevated above 3% for a record 41 months, marking the longest stretch since the early 1990s. The economy continues to print robust indicators with Q3 GDP growth at 2.9% and consumer spending up by 3.7%.
The market anticipates a Trump victory in the upcoming election, likely bringing tax cuts, deregulation, tariffs, and substantial fiscal stimulus. In this context, the Fed's recent 50 bps rate cut in September and the high market odds (94%) for another 25 bps cut at the FOMC’s November 7 meeting seem puzzling.
So, how should we approach trading this scenario? The best move right now is to wait—jumping into a macro trade now would mean accepting the uncertain risks tied to the election outcome. Instead, we can strategize by considering the most promising trade options based on a potential Trump victory and the expected economic impacts.
Trades:
Short ZN (US 10yr Tnote)
Short SFR 12mth Dec25 Fly
Long AUD
Long EUR
After the NFP release, I’ll begin sharing trades along with my entry points and a detailed breakdown of the execution strategy to follow (some will be free and some will be behind a modest paywall).
*worth noting that the month rate will move up once this substack gain traction, expecting to increase towards $100/mth over the coming 3-6mths.