Fra Steen Jakobsen, Saxo bank:

FOMC announcement

Fed drops reference to international concern, but maintains “strong” domestic growth w an undershooting on inflation.

This leaves door open for June hike, but market firmly believes in December….as most likely next hike..

Market sees no “direct reference” and feels vindicated on reluctant Fed….

Stocks small up, eurusd unchanged and bonds at high of the day..



Big non-event but a confirmation that FOMC in no hurry to move.

My call remains the US will flirt with recession this year – Saxo thinks there is 60% chance, which leads us to OVERWEIGHT 10y and 30 yr bonds..


I’m writing macro report this week outlining our 60% call on recession in US and a global slow-down which will mirror this low activity……





Buy T-bond 30 years futures @ 162.00 with stop below 161 or more aggressively below 160…. we see test of NEW LOWS in yield driven by weak consumption, low inflation and a global economy slowing down.


Main calls remains:


·         Weaker US dollar (Vs. AUD, JPY and Gold/SilveR)

·         Outperformance in Gold & Silver

·         Value only in selected EM, energy & mining

·         UNDERweight equity on divergence/expensiveness – collapse in “leaders” like Apple

·         NEW CALL and POSITION – Overweight 30 YR US Fixed income…… 60% chance of recession