Boris Kovacevic (@macrokova) 's Twitter Profile
Boris Kovacevic

@macrokova

Global Macro Strategist.
Charting just for the sake of it.
Opinions are my own.

ID: 1323412685346754560

calendar_today02-11-2020 23:52:35

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Inflation still the priority, not jobs 1. January’s US jobs report delivered a mixed bag for investors. Hiring slowed but wage growth ticked higher and continued the theme of “heightened inflation anxiety” driven by the tariff war and rising inflation expectations. The macro and

Inflation still the priority, not jobs
1. January’s US jobs report delivered a mixed bag for investors. Hiring slowed but wage growth ticked higher and continued the theme of “heightened inflation anxiety” driven by the tariff war and rising inflation expectations. The macro and
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As we’ve previously argued, further dollar upside depends on a sustained trade escalation and actual tariff implementation. With the Fed pause fully priced in, the dollar now requires either a stronger US macro backdrop or deteriorating risk sentiment to advance meaningfully.

As we’ve previously argued, further dollar upside depends on a sustained trade escalation and actual tariff implementation. With the Fed pause fully priced in, the dollar now requires either a stronger US macro backdrop or deteriorating risk sentiment to advance meaningfully.
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The only interesting thing about yesterday's NFIB release was faltering concern for credit conditions despite the Federal Reserve's cutting pause. Historically, tighter credit expectations have led bankruptcy filings by about a year, but with small business sentiment on lending

The only interesting thing about yesterday's NFIB release was faltering concern for credit conditions despite the Federal Reserve's cutting pause. Historically, tighter credit expectations have led bankruptcy filings by about a year, but with small business sentiment on lending
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Today's dollar depreciation despite the inflation beat confirms our asymmetric reaction function and geopolitical dominance thesis. The US dollar weakened today against the euro, even as US inflation came in hotter than expected and Treasury yields climbed across the curve.

Today's dollar depreciation despite the inflation beat confirms our asymmetric reaction function and geopolitical dominance thesis.

The US dollar weakened today against the euro, even as US inflation came in hotter than expected and Treasury yields climbed across the curve.
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When it comes to EUR/USD, it is important to note that US market-based inflation expectations have been trending higher for a while now, with some tenors (5-year) hitting their highest level in years. This is theoretically dragging down the real rate differential between the US

When it comes to EUR/USD, it is important to note that US market-based inflation expectations have been trending higher for a while now, with some tenors (5-year) hitting their highest level in years. This is theoretically dragging down the real rate differential between the US
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Yesterday’s upside surprise in US inflation has significantly dampened expectations for a Federal Reserve rate cut in the first half of 2025. The latest inflation data came in stronger than anticipated, reinforcing concerns that price pressures remain persistent and forcing

Yesterday’s upside surprise in US inflation has significantly dampened expectations for a Federal Reserve rate cut in the first half of 2025. The latest inflation data came in stronger than anticipated, reinforcing concerns that price pressures remain persistent and forcing
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The US dollar is having a bad start to the year due to 1) signs mounting that the US economy is losing momentum and 2) the lack of tariffs so far. Every G10 currency is up against the Greenback ytd.

The US dollar is having a bad start to the year due to 1) signs mounting that the US economy is losing momentum and 2) the lack of tariffs so far. Every G10 currency is up against the Greenback ytd.
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If the greenback’s slump reflects eroding trust in Trump’s economic agenda, could his approval ratings be next in line for a drop? With trade tensions rising and investors reassessing his second-term outlook, it’s a risk worth watching.

If the greenback’s slump reflects eroding trust in Trump’s economic agenda, could his approval ratings be next in line for a drop? With trade tensions rising and investors reassessing his second-term outlook, it’s a risk worth watching.
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Traditionally, escalating trade tensions would drive demand for the Greenback as a safe-haven asset, but investors are now looking beyond short-term flows and focusing on the economic damage these tariffs could inflict. Higher volatility = lower dollar.

Traditionally, escalating trade tensions would drive demand for the Greenback as a safe-haven asset, but investors are now looking beyond short-term flows and focusing on the economic damage these tariffs could inflict. Higher volatility = lower dollar.
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The number of officials seeing upside risks to inflation is now greater than it was at the peak of the inflation crisis—a detail that markets seem all too eager to brush aside. The disconnect between Powell’s rhetoric and the broader FOMC stance is striking.

The number of officials seeing upside risks to inflation is now greater than it was at the peak of the inflation crisis—a detail that markets seem all too eager to brush aside. The disconnect between Powell’s rhetoric and the broader FOMC stance is striking.