Viraj Patel
@VPatelFX
Followers
33,540
Following
6,778
Media
4,137
Statuses
9,206
FX & Global Macro Strategist by day | 90s R&B & Hip-Hop DJ by night | Views here are my own | @VandaResearch
London, England
Joined November 2016
Don't wanna be here?
Send us removal request.
Explore trending content on Musk Viewer
Vance
• 2123807 Tweets
連休明け
• 83775 Tweets
プライムデー
• 76287 Tweets
Amber Rose
• 72001 Tweets
Nairobi CBD
• 62061 Tweets
Tubiana
• 59858 Tweets
朝日新聞
• 53810 Tweets
#Maandamano
• 42675 Tweets
#yks2024
• 42583 Tweets
عمان
• 36164 Tweets
#TADAPOPมาแอ่วลําปางกัลยาณี
• 36004 Tweets
Seonghwa
• 35756 Tweets
Kericho
• 27026 Tweets
जम्मू कश्मीर
• 26428 Tweets
ミュージアムカード
• 25109 Tweets
ムーミンの肉
• 24807 Tweets
जवान शहीद
• 23326 Tweets
アイカツ
• 16530 Tweets
Big Wiz
• 16486 Tweets
Magazin
• 14367 Tweets
高校生15人
• 13059 Tweets
激辛ポテトチップス
• 12921 Tweets
東京・大田区
• 12481 Tweets
救急搬送
• 12469 Tweets
アルカディア
• 12244 Tweets
#Compact
• 12129 Tweets
Pinned Tweet
⚠️ Markets are pricing in the most aggressive front-loaded Fed hiking cycle in modern history. If the Fed delivers 4 consecutive 50bps hikes starting in May... which is starting to get priced in... then this will be more aggressive than what we saw in '94. History being made $USD
35
137
468
President West’s Cabinet...
🇺🇸VP: Jay Z
💰Treasury Secretary: 50 Cent
🌎Secretary of State: Nicki Minaj
🥊Defense Secretary: Mike Tyson
⚖️Attorney General: Meek Mill
☘️Agriculture Sec: Snoop Dogg
🏥Health Sec: Dr Dre
🛳Commerce Sec: Elon Musk
🏦Fed Chair: Ty Dolla $ign
58
264
801
⚠️ I wonder how much of the payrolls upside is to do with seasonal quirks more than anything. Take Leisure & Hospitality. Official adjusted data shows this add +96k jobs. But unadjusted data shows sector shed 466k jobs in Sep. Unadjusted private sector payrolls was -399k 🤷♂️ $USD
39
163
525
⚠️ There it is. BoJ adjusts YCC. Allowing 10Y JGB yields to move flexibly around 0.5% (50bps higher than 0% target). Upper-band around 1%. Slight caveat as 1 dissenter. Forecasts largely in line (core-core at 3.2% for FY23 but headline for FY24 at 1.9%). Upward risks noted $JPY
17
145
461
⚠️ US revolving credit. Contracted in June for the first time since March 2021. Rarely falls outside of a crisis or end-of-cycle recession $USD
22
128
467
⚠️ This is the start of the Fed pivot. The breadth of US CPI is down sharply and moving back to a level that isn't showing 'scary' inflation. This is what matters for the Fed. One data point doesn't make a trend... but chart below shows we're moving in the right direction $USD
66
123
448
⚠️ Here's the share of those unemployed people in the US for 15-26 weeks (purple line; white line is absolute). That went up again in July. This only happens when the labor market is turning and become less tight. Was a warning shot in '00 and '07/08 $USD
31
135
444
⚠️ The big market call for '24 is not just if the Fed cuts or not, but what type of easing cycle we see. Market curve looks nothing like prior Fed easing cycles. Street always underestimates magnitude of Fed cuts ex-ante. Next 2-3 NFP reports key to which way curve shifts $USD
9
126
452
⚠️ Even if a crisis is averted this week, wonder if the damage to the real economy from SVB is done. Banks think twice about lending. Firms/consumers think twice about borrowing. Confidence/animal spirits falling further. Important channel to watch in coming weeks $USD
34
82
387
On $JPY - the problem with intervention is that once the genie is out of the bottle… it’s hard to put it back in. We’re at a stage where MoF/BoJ have no choice but to intervene. The best way would be for BoJ to hike 25bps this week. It’s not about the macro anymore (BoJ
21
82
342
Oh boy, Europe is in deep trouble! The worst isn't even here yet... $EUR
28
115
317
⚠️ US services was one of the last shoes to drop before a recession. That shoe has now dropped... $USD
9
94
311
When you’re Excel crashes at 1am in the morning and you lose all your COVID stats. Who’s been there 🙋♂️
12
47
292
⚠️ One red flag in the US jobs report: Share of those unemployed for longer than 15 weeks rose to its highest since the pandemic. We only see this type of pattern during the early stage of a recession. Not a sell reason today. But cracks are showing & worth monitoring $USD
6
96
299
⚠️ Something you don't see everyday - looks like Israeli Shekel started selling off first... $SPX following more recently
8
56
261
⚠️ The Fed is usually in easing mode when both ISM services and manufacturing new orders are below 50! We're now there... (Note services only goes back to late '90s) $USD
20
70
252
At this rate... the No 10 summer intern is probably going to be Home Secretary in a Johnson govt
$GBP
12
27
246
⚠️ What can the BoE do in a $GBP fiscal crisis? Emergency hike but markets will want >200bps (kills economy). BoE has small FX reserves pool. Treasury needs to instruct BoE to use theirs. Even jointly... reserves will run out in weeks. BoE thrown to market wolves. No easy way out
22
55
244
Brainard wrote the policy statement. Bullard wrote the press conference answers
$USD
5
45
242
⚠️ Every single ISM manufacturing category sub-50. First time since Covid. Grim $USD
13
49
245
⚠️ The Fed has never hiked rates when ISM New Orders has fallen before 50. Today it fell to 49.2.
$USD
21
66
241
⚠️ March saw biggest tightening in US Small Business Credit Availability since 2002 (joint 2nd biggest on record). NFIB confirms credit tightening happening as a result of bank failures. 1st clear sign for Fed to digest. Hard to see this as temporary at this stage of cycle $USD
8
78
241
🟣 Friday's 'Omicron' sell-off saw the second biggest day of net retail buying of US stocks on record ($2.04bn). Similar to what we saw after the Delta sell-off in July where the retail crowd also looked to snap up some bargains. Positive sign for US equity bulls
@VandaTrack
$SPX
14
58
238
Old enough to remember when 4.5% gilt yields were high enough to break the UK economy 🤓 $GBP
21
26
219
⚠️ Moves in FX land tells you something looks a bit off today... tread carefully!
$USD
15
48
201
Anyone know when the Federal Reserve will step in and intervene in the Presidential Election by buying Joe Biden and putting him on the Fed’s balance sheet
10
21
182
⚠️ Under the hood... this was a soft CPI report. Only 35% of the basket showed more than 0.2% MoM inflation. Goods, clothing, food & energy all pretty much in deflationary territory (56% of basket saw price cuts). In other words, only a few things drove CPI upside. Dovish $USD
11
54
202
⚠️ Never a good sign when your currency weakens when you've raised interest rates..... $GBP
12
21
206
⚠️ This is insane. I wouldn't be surprised if we get QE or Yield Curve Control because this is market dysfunction $GBP
26
38
197
Only in the UK does the government's 'growth plan' cause growth to be downgraded... 🤓 $GBP
Deutsche Bank slash UK growth forecast -4.5% 2022, -0.5% 2023, +1% 2024
‘We now expect GDP to return to its pre-pandemic level only in 2024, with growth recovering to its trend rate (1.25%) around the middle of the decade’. (Narrator: that is *not 2.5%)
8
6
28
9
40
192
⚠️ The one chart that shows the BoE & Chancellor still have their work cut out. Bid-ask spreads for longer-dated gilts increased sharply after Truss' speech on Fri. Sign of liquidation by pension funds/real money investors. BoE will have to step in if this continues on Mon $GBP
9
50
190
⚠️ QT is still happening! Don't be fooled by the Fed's latest increase in its balance sheet. That's not the type of increase that boosts risky assets or potentially generates reflation. A lot of false narratives out there. Tread carefully $USD
11
47
185
⚠️ Tokyo core-core CPI inflation printed at +0.575% MoM. That's the 2nd biggest monthly increase since Covid. And one of the biggest monthly increases over the last 30 years outside of sales tax hikes. Inflation is not transitory in Japan... $JPY
4
71
186
⚠️ Fed sends taper signal and '22 hike looks increasingly likely. '23 (1%) and '24 (1.8%) dots materially higher than expected. This is a lot more hawkish and suggests we're getting a pretty strong hiking cycle post lift-off. Everything the market hawks would've wanted $USD
11
46
180
⚠️ If you're looking for 'red flags' then the May NACM Credit Managers Survey showed the biggest rise in bankruptcy filings since Covid/GFC (driven mainly by services). Signs that tighter credit conditions & rate hikes are doing what they should at this stage of the cycle $USD
6
66
186
⚠️ Riksbank unexpectedly raising rates by 25bps. Wouldn’t be surprised if they’ve spoken to their ECB counterparts and know something. Raises the possibility of ECB going early in June (rather than July). Europe needs to build dry powder quick for next looming recession $SEK $EUR
12
50
180
⚠️Global bonds markets are suffering from liquidity issues... and it's not just the US. JGB markets now seeing poorer liquidity conditions than Treasuries. Hasn't been this bad since the GFC. Hard to see this ending well...
$USD
9
63
177
⚠️ The four country criteria for the ECB's TPI:
1. Compliance with EU fiscal rules
2. Absence of severe macro imbalances
3. Fiscal/debt sustainability
4. Sound & sustainable macro policies
Chances of BTPs not meeting these criteria come Sep/Oct pretty high... no?
$EUR
12
65
169
When you intervene in $JPY markets and don’t even have to log into Bloomberg 😂
6
30
175
this 👇
the dollar sell off is going to end rather abruptly when the rabid hawkish consensus on the ECB collapses like a house of cards when sovereign spreads blow up. Again
12
19
175
10
18
170
⚠️ The "Don't Fight The Fed" crowd are back. Usually when that happens you want to take the other side...
$SPX $USD
23
29
164
⚠️ That was one heck of a miss in French CPI. Not just food. But weakest monthly goods & services combo for March since '09/10. Spain was soft. Belgium too. If Germany misses even the slightest... ECB cut in a few weeks at Apr meeting will be close (likely very dovish hold) $EUR
15
43
171
⚠️ Small BoJ hikes won't trigger a big rally in JPY. Previous large unwinds in the Yen Carry Trade show that it's not just wider JGB-UST yield differentials that are required... but *lower* US yields & higher vol are also non-negotiables. These aren't being met right now $JPY
6
31
172
⚠️ % of ISM Services respondents expecting higher new orders is at its lowest since the GFC and lower than '01 recession $USD
5
44
171
⚠️ This Fed hiking cycle is already unique. It would be even more unique if the Fed paused and accelerated hikes again. That has never happened. Usually the Fed keeps on hiking until something breaks and they're forced to cut. Higher for longer is a myth $USD
6
46
171
After 4 great years at ING, I’ll be moving on to new adventures.
I want to say a huge thank you to
@ING_Economics
- mainly for letting me use everything from 80s pop songs to UK rap in my research 🙏
Also thank you to the FinTwit community for your support. Watch this space 👍
19
10
165
⚠️ UK 2Y inflation swaps... 5% above historical averages. This isn't normal $GBP
7
27
159
After Trump's FX manipulation tweet - we should be on high alert for active White House policy steps to weaken $USD. One way -> Treasury FX intervention:
* 1988-1990 last time US unilaterally sold $'s
* Done via ESF facility... limited firepower (~$22bn)
US FX intervention 101 👇
8
63
159
⚠️ Don't read too much into the Riksbank's 100bps hike. They've maybe got one more big hike left & then DONE according to their forward rate path. Don't think there's much cross-read for other central banks (like Fed)... European central banks were/are playing catch-up $SEK $EUR
17
24
155
The Fed has hit 2%… on 10Y inflation
11
25
151
⚠️ No doubt UK assets are cheap... none more so than the pound. But running through the list of how things could get worse... these 'grey swan' events are hard to ignore. UK not a 'screaming buy' yet at these levels. Outcomes are getting binary... both tails look interesting $GBP
7
24
151
Central banks if they were Premier League clubs:
Fed - Chelsea (steady, defensive)
Norges - Liverpool (leading the way)
ECB - Tottenham (all over the shop)
RBA - Arsenal (poor start, coming back strong)
BoE - Newcastle (new owners, huge uncertainty)
BoC - Man Utd (high risk)
10
26
151
⚠️ Hiring and quits rate fell in Nov JOLTS report. Both below pre-Covid levels (and levels when the Fed starts to cut rates). Whether it's a blip will remain to be seen. But it suggests that animal spirits in the US jobs market are waning sharply & faster than NFP implies $USD
2
50
149
⚠️ '22 Fed hiking cycle is the most aggressive in 40 years. But even more unique is that the Fed wants to keep rates on hold for >12 months. They usually start cutting within 6 months of last hike. Closest example of higher for longer is '04-'06... and we know how that ended $USD
6
70
147
⚠️ UK flash PMI:
- Biggest fall in services activity since Jan
- Longest decline in manf activity since 08/09
- Lower jobs 2nd month in row
- Softer services costs (wages)
- Goods prices declined fastest since '16
Only hawkish factor:
- 3M high in prices charged (services) $GBP
4
53
147
Leaking to the market 12 hours before the meeting, and then only to then sit on their hands, would be something that well... only the BoJ does
$JPY
9
14
148
Bank of England confirms that its balance sheet relative to GDP is the highest since... let me check x-axis... 1700 👀
Just in case anyone had doubts that current QE wasn't as aggressive as the early 18th-century asset (coin?) purchase scheme
6
60
140
⚠️ No action from the BoE based on latest statement... looks like they aren't doing anything inter-meeting. This will be a disappointment for $GBP markets. I suspect this statement will last 24-48 hours before something breaks in markets & forces the BoE to act
11
39
138
Druckenmiller: "I don't see a fat pitch right now - but some really fat pitches will come in 8-24 months. Don't want to blow my cash."
Sometimes it's ok to do nothing. The complexities right now means that this may be one of those times $USD
8
19
136
Born and bred in London. A* in GCSE English Language & English Literature. Studied at Cambridge writing countless essays in English. As I wrote... “USD looks prime to rebound” if you take away the subordinate clause
@VPatelFX
What do you mean? Usd will fall more? Gbp? Probably English is not your mother language and we cannot understand what you said
3
0
0
18
5
138
⚠️ One red flag in the Dec US jobs report is that the duration of unemployment has continued to tick higher - something that only happens when the labor market is weakening (ie, into a recession). Something to watch out for in Q1 '24 as it can be a slippery slope $USD
2
29
139
⚠️ Yellen's the head fake. Remember Europe is the most crowded overweight in equity (and short in bonds). That's where the biggest liquidation/capitulation risks lie. ECB won't be hiking or holding if Fed is in deep easing cycle. One of these curves looks wildly wrong $EUR $USD
13
42
139
The bizarre thing is that the energy price caps/intervention is doing what it needs (stopping gas prices from moving higher & curbing UK inflation). They really didn't have to announce tax cuts at the same time. Will go down as one of the biggest UK policy mistakes ever $GBP
8
23
132
⚠️ SLOOS survey shows credit conditions tightening on the margin from post-SVB levels. Now near early '00 recession levels. % reporting demand for loans was still deeply negative (around '09 levels). No signs of easing in credit conditions. Things remain late-cycle tight $USD
7
30
134
⚠️ Another red flag from the UK jobs report this morning (not much talk)... the BoE has never hiked rates whenever jobless claims hit these levels. In fact, it's usually a trigger for cutting rates $GBP
16
27
132
⚠️ Go big or go home. BoE raises rates by 25bps but 4 dissenters for 50bps hikes shows where the risks are - they want to go fast and swift in this hiking cycle (like '94/95). Suggests more hikes to come in the coming months... whilst QT also starting. As hawkish as you get $GBP
4
30
130
3-4 dissenters from ECB. They wanted to wait to monitor fallout from recent financial risks $EUR
7
23
127
⚠️ $USD's corrective rally of late smells a lot like crowded shorts bailing as opposed to any $ liquidity crunch (given cross-currency basis swaps haven't widened). There's a case to be made that the $ could continue moving higher if non-Fed G10 monetary easing sentiment picks up
9
30
128
Anyone strategist/economist that puts slides together on a daily basis knows this isn't easy to format in a few hours. BoJ had this cooking for a few days/weeks now... 🤓
5
29
120
List of Central Banks buying assets (inc FX):
🇺🇸 Fed
🇪🇺 ECB
🇬🇧 BoE
🇯🇵 BoJ
🇨🇭 SNB
🇦🇺 RBA
🇳🇿 RBNZ
🇸🇪 Riksbank
🇰🇷 BoK
🇹🇭 BoT
🇵🇭 BSP
🇵🇱 NBP
🇷🇴 NBR
🇪🇬 CBE
🇿🇦 SARB
Coming soon:
🇨🇦 BoC
🇳🇴 Norges
🇭🇺 NBH
🇨🇿 CNB
QE is the New Normal
13
68
120
Did Jeremy Hunt just say UK inflation “fell 40%” by quoting the fall from 11% last year to 6% this year…
He would’ve failed GCSE Economics with that type of answer 🤓 $GBP
10
7
121
⚠️ BoE headlines read hawkish. But it's all on stale backward-looking data. UK jobs market showing cracks already. Core CPI will come off sharply given underlying pace of late. Fade any hawkish reaction. BoE will have plenty of room to cut rates in '24 once the penny drops $GBP
7
22
122
⚠️ UK shop prices fell by most in Jan since Apr '20 (BRC). Big discounts across goods/clothing. Yeh this happens most Jan's pre-Covid. But point is UK price dynamics *are* returning to pre-Covid norms & you don't get big price cuts if demand isn't weak. BoE should take note $GBP
3
18
124
⚠️ The ECB's core CPI projection at 5.1% is disregarding the lead from producer prices. That means they are forecasting some big margin expansion when rates are at multi-decade highs, lending is weak and growth is anaemic. Seems too optimistic $EUR
5
26
122
⚠️ BoE hike rates 50bps. Headlines are hawkish. But key word in the statement is "IF there is more persistent price pressures... further tightening will be required". I think that's a pause & pivot from the BoE. Not entirely clear though. Presser will tell us more $GBP
10
24
121
*BOE'S BAILEY SAYS INTERVENTION IN MARKETS WILL BE TEMPORARY
Unfortunately the BoE will learn that this is not their decision... and markets will decide for them. We know the playbook now... $GBP will tank, bonds sell-off &the BoE will be back intervening before they know it...
4
23
122
⚠️ 50bps hike from BoE. Go big or go broke time. Necessary to nix inflation expectations & retain credibility. But make no mistake this was a defensive hike. Read from the MPC statement & minutes is not a central bank that *wants* to take rates to 6%. My 5 takeaways 🧵:
$GBP
6
25
120
⚠️ UK unemployment jumps to 4.2% from 3.9%. That is the biggest monthly uptick since the pandemic. Pipeline weakness coming through given March PAYE jobs change was -67k. Sticky wages (led by few sectors + PAYE points to softer pay in Mar). Weak jobs a big worry for BoE $GBP
4
34
120
Adding Saudi Arabia's huge ~$25bn effort to stabilise its FX in March... EM FX reserves for 14 major economies fell by $170bn last month. A 2.81% monthly drawdown - 2nd biggest in over 15 years. An unprecedented effort by EM countries to combat a shortage of global $USD liquidity
8
46
119
⚠️ UK shop price inflation saw weakest March since '06 (-0.4% MoM). 3M avg inflation is at its lowest since Jan '21 & consistent with a weak inflation backdrop. UK goods/core inflation to take another leg lower in Mar sub-4%. Door now open for faster BoE cuts this summer $GBP
7
38
117
⚠️ Bank of England estimates that UK households will spend around 7-8% of household income on mortgage payments later this year. Levels we haven't seen since GFC and early '90s recession $GBP
20
35
118
⚠️ All the focus will be on UK wages (ex-bonus a bit softer). But here's a real canary in the coal mine indicator... UK jobless claims for May at its highest since '21. Strip out Covid & it's the highest monthly reading for claims since '08 GFC. More weak jobs data coming $GBP
3
33
121
🚩 Stunning chart from UK CBI retail sales survey. Surplus stock of cars relative to expected demand at its highest in a decade (only higher in Q4 '08 & Q1 '12). Stark contrast to 18M ago when car supply was at record lows. Suggest more goods deflation still to come in UK $GBP
4
33
120
⚠️ ECB is currently juggling 3 puts: (1) a put on higher inflation; (2) a put on a weaker EUR; (3) a put on tighter financial conditions (wider BTP-Bund spreads). But only 2 out of 3 are achievable at any one time. Short BTPs… ECB hawks have chosen curbing inflation & weak $EUR
3
30
117
👀 that jump in ADP job changer wage growth from 7.6% to 10%...
...things you don't see in a slowing labor market $USD
7
39
116
⚠️ Treasury bears be aware... Beijing engineering a weaker yuan usually marks a top in yields. Some of the recent UST selling pressure has been PBoC stabilising $CNY. No surprise US 10Y yield has peaked at the same time CNY has sharply weakened. One less UST seller in the market
3
29
118
⚠️ Empire manufacturing has been jumpy in recent months. But 6M average falls to cycle lows. And has only been lower in GFC & Covid. Don't miss the forest from the trees... state of the global economy looks bleak $USD
14
33
114
“IMF bailout” for UK… that’s peak bearishness for $GBP markets when people are talking about this
8
16
111
⚠️ Bye-bye NIRP & YCC. End of an era for BoJ monetary policy. BoJ will still buy bonds to contain disorderly rise in JGB yields. But official "peg" removed. No clear guidance around additional hikes
$JPY
6
38
115
⚠️ FOMC minutes say Fed to unwind balance sheet by letting $60bn USTs roll-off per month. Touch more dovish than probable consensus... as getting the Treasury holdings down by $2trn will take nearly 3 years. Plus the 1 or more 50bps hikes are well priced. No hawkish surprise $USD
10
28
110