An Emerging Bond Trade?

Published on
May 1st, 2019
Duration
17 minutes

An Emerging Bond Trade?

Trade Ideas ·
Featuring Anthony Antonelli

Published on: May 1st, 2019 • Duration: 17 minutes

Anthony Antonelli, CFA, CMT, director at Greylock Capital Management, makes his Real Vision debut with a bullish bet on emerging markets. He notes how mean reversion should lead to a profitable 2019, highlights the Fed’s impact on the thesis, and considers risks investors should pay attention to, in this interview with Jake Merl. Filmed on April 26, 2019.

Comments

Transcript

  • NB
    Nikola B.
    1 May 2019 @ 19:20
    At around 9:01 Anthony talks about why he believes that the dollar will weaken, referencing the increased supply of US Treasuries and that those who will be buying them will be "flooded with dollars". I tend to disagree with this logic, because when the supply of Treasuries increases, this represents extra demand for dollars, while the dollar liquidity (i.e. supply of dollars) is still being withdrawn by the FED's QT (although it will stop in September), so the supply of dollars is shrinking. To me it seems like the shortage of dollars will only get worse, unless the FED completely reverses course on QT and resorts back to QE.
    • BF
      Brad F.
      1 May 2019 @ 22:37
      Isn’t QE the Fed buying treasuries? So neutral in terms of supply and increasing demand, therefore having the opposite effect of “flooding the market”.
    • NB
      Nikola B.
      2 May 2019 @ 09:48
      Not only treasuries, could be other assets from banks’ BS, a new round of QE would bring more dollar liquidity, but the shortage of dollars globally is quite acute and the ballooning US deficit means more dollars will need to go towards financing that deficit, so a dollar bearish case is difficult to fathom here