Volatility pre-empts risk, risk pre-empts opportunity.

(Northern) summer trading can be volatile with lower volume but when investors saw the ISM numbers last week, the Japanese interest rates moved up to positive rates, and the JPY currency bounced hard, momentum in positioning moved seasonally earlier than usual.

• Tonight's (Monday 5th August) US ISM & PMI services numbers may, or may not, confirm the breadth of the slow down in economic growth and the consequences for employment.
• The current quarterly reporting season could likely confirm what many results are already warning about consumer demand and what the macro longer-range indicators have suggested.
• The lastest unemployment and ISM manufacturing indicators in recent days are proving to confirm the indicators we have been monitoring for evidence of the cyclical-rhyming with a hard landing scenario.

The narative is changing. Until now it's been one of inflation slowing means interest rates will fall.

NOW it's no longer about inflation. But growth that is slowing...collapsing and headline unemployment data (the co-incidental indicator) is finally being unmasked from the distortions from government-related employment.

• The only interest rate changes that are actually mattering most are the increase in rates in Japan (from negative to positive) and the resulting unwinding of the global leverage carry trade into risky assets.