Global Macro: Bouncing Off China Walls

MarketsMuse sends out a shout out to for profiling Global Macro guru Neil Azous from Rareview Macro, who “always looks to challenge the consensus and the sometimes lazy view of the prevailing market set up.” In yesterday’s note he focused on China, and the consensus view that the cyclical bounce in China has ended. What’s this mean for risk positioning? Has it already been discounted? He looks to the two most prominent barometers of risk; the USD and S&P500. He argues that while the consensus may be keen to embrace another move higher in the dollar, and a break lower in the S&P, the next set of requirements are yet been met. Indeed the recent sell off from last week’s S&P highs may have accounted for the weak China data in advance.

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Neil Azous, Rareview Macro

But what really matters here for risk is the continuous bid-tone in oil, says Azous. Because if investors believe that the cyclical bounce in China is over, they are by defacto saying that the emerging market inflation impulse has dissipated as well, which implies a total reversal of the FX carry trade. Azous argues that can only happen if oil moves back to $30, and he just can’t see that happening.

To access Rareview archive or to arrange a meeting with Azous to discuss Rareview Macro’s “Sight Beyond Sight” product click here
Neil Azous is the Founder and Managing Member of Rareview Macro, an advisory firm to some of the world’s most influential investors and the publisher of the daily newsletter Sight Beyond Sight®. Neil has close on two decades of experience across the financial markets, and is recognized as a thought leader in global macro investing. Prior to founding Rareview Macro, Neil was a Managing Director at Navigate Advisors where he specialized in constructing portfolios and advising on risk. His daily commentary was highly regarded by the institutional investing community and his success in delivering a forward-looking viewpoint on global markets helped lay the foundation for Sight Beyond Sight® to be built. On Wall Street, his career included roles at UBS Investment Bank and Donaldson Lufkin & Jenrette, where his responsibilities comprised of trading derivatives, hedging solutions, asset allocation and fundamental securities analysis. He began his career at Goldman Sachs in Fixed Income, after completing both the firm’s Analyst and Associate training programs, widely acknowledged as the pre-eminent and most coveted learning ground for undergraduate and graduate students. Neil completed graduate level coursework for a MS in Real Estate at New York University and received his BA in Business Administration from the University of Washington, where he is a member of the University of Washington Bothell Board of Advisors and was the recipient of the Bothell Business School 2013 Distinguished Undergraduate Alumnus Award. He is active in various charity and community organizations.