Previous Issues

THE CAPITAL OBSERVER

February 2018 -   published on February 8th 2018

Contents

24 / EM economies and assets are outperforming, but a US dollar resurgence later in the year may derail MSCI EM$ and EM currencie

04 / Executive Summary

06 / Mapping the markets

32 /  Inventories’ negative seasonality and outlook of large US oil output threaten a pullback in oil and E&P equity prices

20 / Timing and Tactical Insight 

Emerging Markets still look strong towards late Q2, yet may underperform until March

35 / Timing and Tactical Insight

The latest Sell-off is probably an initial warning of the end-game to unfold later this year

18/ Timing and Tactical Insight

Commodities may consolidate towards late Q1, they should then re-accelerate up again towards late Q2 / midyear

12/  Commodities’ Allure As Diversifier, Growth articipation Asset And Inflation Hedge Enhanced As The Fed Poises To Tightens Monetary Policy Even Further

41 / Eurozone will keep growth momentum going in 2018 on weaker EUR/ USD, but political risks will become even more elevated

52 /Splicing the markets - Could H1 2018 see the return of the Yen carry trade ? 

44 / Timing and Tactical Insight

Strong potential, yet will it be fulfilled? Financials still look strong at least

Kill the quants before they kill our markets:

« I believe the precipitous market drop in the last week has little to do with the projected course of interest rates or, for that matter, fundamentals. It likely was a function of the distorted, dangerous world of new investment products and strategies.... [T]he proliferation of short vol, volatility trending and risk parity strategies when combined with an explosion of leveraged ETFs and ETNs – many of which were derivatives of derivatives and had no business existing except to please gamblers – had altered the market structure»


Doug Kass