The 2015 Global Macro Edge

The major macro themes of interest for 2015 are:

i. the beginning and pace of the tightening cycle in the US.

ii.the expansion of ECB's balance sheet and reflation of Euro area.

iii.the Bank of Japan's QE.

iv.Chinese Growth

v. Saudi Arabia vs. shale oil producers – Oil Prices

vi. Ukraine Crisis

vii. Russian Economic Crisis – Emerging Markets

viii. UK’s 2015 General Elections

ix. 2015 Greek Elections – Effects of Grexit?

How Cold War 1 was won!

1) Convince the Saudis to flood the market with cheap oil.

2) Lower Oil prices => Devaluate the Ruble=>USSR goes bankrupt.

3) Mission Accomplished!

Dollar surges in 2014 on rate rise hopesThe dollar rose against all other major currencies in 2014 for the first time since the turn of the century, as investors expecting interest rates to rise piled into the greenback.

The US currency made gains against the euro, yen, pound, South Korean won, Brazilian real and 11 other global currencies last year, marking the first time since the height of the dotcom boom in 2000 that all major currencies as ranked by Bloomberg have fallen against the dollar.

Expectations that the Federal Reserve will raise interest rates in 2015 from historic lows have been a major factor in the dollar’s strength, as central banks in other countries including the European Central Bank and the Bank of Japan continue to take an easing stance. The euro and the yen both fell 12 per cent against the dollar in 2014.

Traders say this could be the big short for 2015

While stock traders have been piling into the Santa rally, bond investors this holiday season have been busily building what some say could be the biggest short position ever in Treasury futures.

That's a massive bet that interest rates will rise.

George Goncalves, head of rate strategy at Nomura, calculated some $29 billion worth of shorts across the Treasury futures complex—the highest level, post-financial crisis.

DISINFLATION!