The Vacuum Bull

Absolutely no yellin'

1. Light.....This week had the 1st, 2nd and 4th lightest notional volume days of the year. This is the reverse of "when there is yellin' you should be sellin'...

2. Healthy.....Despite the very light volumes, GS trading desk reports surprisingly healthy liquidity (top of book), corporate bid, CTA bid, passive Asset Manager demand, and balanced HF flow.

3. Streak.....Mighty DOW posts its 8th consecutive green day, its longest winning streak since December

4. Bezos' back......Amazon hit an all-time high Thursday before retreating somewhat. Bezos closig in on first place of that "richest man in the world" list...

5. No vol......VIX Benjamin Button:ed out of teen-age years and closed at its lowest level since January 23

All in all, too quiet and calm to short into and we do wonder if this is the calm before the melt-up storm...?

The volatility view: The world is alright

Aggregate cross-asset volatility - chart shows percentile of 3-month implied volatility since 2010. Rates the only odd one out.

Source: Goldman


Rates vol has peaked

Goldman says that US rates vol implied by macro variables has peaked and should normalise vs. equity vol.

Source: Goldman


Lowest since 2015

The CBOE VIX of VIX, the index tracking the implied volatility of VIX options, fell to its lowest level since May 2015. 2015 !!!

Source: @barchart


Global Goldilocks

Goldman: "Global growth/inflation mix should improve further with gradual rate cuts from Q2 2024"

Source: Goldman


Source: Goldman


Upbeat outlook for global earnings

Chart shows 2023-24 consensus EPS growth estimates: US, Europe, Asia Pacific.

Source: BofA


Winds of disinflation

Ex-US, the winds of disinflation remain in full force (45 country basket).

Source: BofA


Inflation normalisation is now well priced

Markets are pricing normal risk of an inflation overshoot. Chart shows option-implied probability of US 5-year inflation.

Source: Goldman