The Market Matters Global Macro ETF Portfolio Tracks our top 10 global macro calls, and provide avenues to trade them via ASX and internationally listed Exchange Traded Funds (ETF’s) – Click here to view
The portfolio was down this week off by -1.57% with cash sitting at 15%.
No change here from last week for MM as the $US failed to provide us with another spike to the downside to fade through reversing our long $A position. However while we believe the current $US recovery has further to unfold MM still believes it’s a countertrend bounce as opposed to an important change in trend. The previously outlined moves in bond yields has finally brought an opportunity in the long end into our buy zones, a scenario we have been stalking for a few months:
- MM is looking to allocate 10% of our Global Macro portfolio into the TBF ProShares ETF under $US17.00 initially targeting ~15% upside i.e. calling a rally in longer dated bond yields (a sell-off in bond prices)
We exited the same position back in March at higher levels but we believe the risk / reward has now returned. This action might seem to contradict our call that the yield curve will contract but it will take time as shorter dated yields will probably need further comments from the Fed to advance whereas the longer dated ones can simply go back to March’s highs on some positive inflation data making it an easier position, at least for now.
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ProShares Short 20+ year US Treasury ETF (TBF US)
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ProShares Short 20+ year US Treasury ETF (TBF US)
