Oil narrative doing a 180 — we've gone from supply shock concerns to staring at a potential glut. Surplus fears building.
The implications ripple everywhere:
1. Cheaper oil = deflationary pressure
2. Fed's calculus shifts when energy costs drop
3. Bond markets reprice inflation expectations
4. Risk appetite changes as the disinflationary tailwind returns
Macro never sits still. Just when everyone positioned for one regime, the underlying dynamics flip. This is why staying dogmatic on any single narrative gets you killed.
Watch how this plays into Q2 positioning — if oil keeps sliding, it gives central banks more room to maneuver, but also signals weaker global demand. Double-edged.
The implications ripple everywhere:
1. Cheaper oil = deflationary pressure
2. Fed's calculus shifts when energy costs drop
3. Bond markets reprice inflation expectations
4. Risk appetite changes as the disinflationary tailwind returns
Macro never sits still. Just when everyone positioned for one regime, the underlying dynamics flip. This is why staying dogmatic on any single narrative gets you killed.
Watch how this plays into Q2 positioning — if oil keeps sliding, it gives central banks more room to maneuver, but also signals weaker global demand. Double-edged.