Citi — Global Macro Strategy Views and Trade Ideas: Five Bearish Worries We Are More Constructive On, and Two Game Changers
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Citi's global macro strategy note on views and trade ideas walks through five bearish worries the team is more constructive on, plus two potential game changers. The exhibits support the discussion across growth, rates, positioning and structural themes. Citi's key macro indicators remain bullish (Figure 1), and after the latest nonfarm payrolls report the bank's estimated 'Warsh shadow rate' moved further higher (Figure 2). Cross-asset volatility sits at historic lows (Figure 3). On the structural side, a large pipeline of data-center projects is planned or already under construction (Figure 4, source: Electric Choice). Japan-related flows are examined through portfolio investment data for the 2021-23 Fed hiking cycle, which show Japanese purchases of US Treasury assets were tactical, pausing when the Fed began hiking and resuming afterward (Figure 5). Ship-tracking data indicate Chinese LNG imports are running low (Figure 6), while euro-area industrial production and exports are tracked quarter-on-quarter (Figure 7). Figure 8 marks representative market positions to market, showing current levels as of the 11th. Collectively, the charts provide the market-based evidence behind the note's framework for weighing those worries and game changers.
Key exhibits
Exhibit 1
Exhibit 2
Exhibit 3
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Exhibit 5
Exhibit 6
Exhibit 7
Exhibit 8
