The Macro Trading Floor Cracks In The US Labor Market - What Next?
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Sep 6, 2025 The discussion kicks off with a dive into the U.S. labor market, revealing a concerning jobs report and its potential repercussions. Alf and Brent analyze the complexities of the Relative Strength Index (RSI) and how it can guide trading strategies. They reflect on historical Fed actions and their impact on unemployment, all while contrasting current economic trends in the U.S. and Canada. Humorously, they acknowledge the challenges of recording from afar, mixing in gratitude for their audience's support.
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Hedge Fund PMs Underinvested In Bonds
- Alf recounts speaking to macro PMs who were underweight bonds and FX hedges despite fearing slowdown.
- He highlights a common industry bias against owning long-duration assets today.
Positioning Lags If Slowdown Persists
- Many managers are under-positioned for a nominal growth slowdown, lacking sufficient long-duration bonds and safe-haven FX.
- If slowdown persists, fixed income and yen exposure may be massively underowned.
Trade PPI Before CPI This Month
- Focus on PPI this month because it prints before CPI and predicts CPI misses.
- Use PPI as a higher-signal input for short-term trades ahead of CPI.
