Global equities continue to mock the bears. The MSCI World was up 2.6% on the month in January, comfortably outperforming yours truly, which had to contend with 1%. The MSCI World is now up a cool a 8.1% since November, and while we saw faint signs last of weakness last week, it was really only a minor flesh wound for the bulls. Indeed, Friday's NFP number was a real treat for everyone. A solid headline and a poor wage print equal goldilocks and joy for both bond holders and equity bulls. As so often before, Spoos and Blues carried the day.
Read MoreOne the more enjoyable things about reading Macro Man in recently is that the author's mood, as well as the spirit of the more battle hardened of his commenters, have been lifted significantly. This is not because they necessarily wanted Mr. Trump to move into the White House, but rather because the political shock in the U.S. appears to have brought back good old fashioned, active, macro trading.
I am not sure it ever left, but I sympathise with the idea that the change in political winds in the U.S., and Europe, will unlock hitherto barren markets for swashbuckling macro investors. The added joy of such a story would be that the index huggers and risk-parity brigade would see their clout diminished somewhat. After all, bond yields are now rising again, and next year's political constellation in Europe could well create a number of new currencies to dabble in. I doubt Macro Man will be that lucky, though, but one can always dream I suppose
Read MoreInvestors are beginning to get seriously interested in the idea that the BOJ and the ECB will change the composition of their bond purchases to steepen the yield curve. In effect, this would be the opposite of the Fed’s Operation Twist, which saw QE purchases concentrated on the long-end, chiefly to lower the yield on mortgage-backed securities. I think this story, at least partly, is to blame for the recent nudge higher in global bond yields. But we will know soon enough. This week's BOJ meeting should give us a hint of whether this narrative has any legs.
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