Odd bins
Investment Conclusion
Two portfolio adjustments have been made: one anticipating the fall of the Bayrou government in France on Sept 8 and the other following the downfall of Prime Minister Ishiba in Japan. One is to add back short 10yrs JGB positions. The other is to add a long Italian 10yrs BTPs position to the 10yr OATs French sovereign bond short. The Wealth Preservation Portfolio is at the end of this report.
US Fed.
My conviction on the US Fed is that the Jackson Hole change in the reaction function (which some of my nicest, smartest clients contest) plus a revised view of the US jobs market (see Nick Kennedy’s contribution below) will lead to a series (3) of rate cuts. I would not even rule out a 50bp cut at the FOMC meeting on September 17-18.
Shipping.
Shipping: the weeks data speaks to stabilisation (at last) of US container inflows at about the same level as last year. A maritime version of limbo, not heaven but not hell either.