Back in mid-2009, we said that with the Fed and central banks nationalizing capital markets, macro and even micro data and newsflow will matter increasingly less and less, and the only thing that does matter is the Fed’s weekly H.4.1 statement, showing the changes to the Fed’s balance sheet. It also means that so-called “data dependency” is a farce (it is, and has always been “Dow dependency”), and that the impact of incremental newsflow will shrink with every passing week until virtually nobody pays attention (we have largely reached this state now).
Since then it has been entertaining to watch how one after another stoic trader and commentator has thrown in the towel on conventional market orthodoxy to adopt precisely this kind of “tinfoil” thinking, the latest example being Bloomberg’s macro commentator Mark Cudmore, who in his overnight Macro View writes that “traders should should spend less time studying economic releases and listen to the clear guidance from officials instead.”
The relevance of data is declining. Policymakers around the world are trying to make crystal clear that they’ll ignore that which doesn’t fit their narrative. Many financial commentators have failed to make the transition and are incorrectly transfixed by each data release.
Or, in short, data no longer matters in a world of central planning.
Here is his latest Macro View in which Cudmore explains why “It’s Time for Traders To Listen Rather Than Watch“
Data-dependency is becoming passé for global policymakers. Traders should should spend less time studying economic releases and listen to the clear guidance from officials instead.
For years, policymakers have been emphasizing data dependency. Investors took a while to fully register the message and, as a result, often got whipsawed by throwaway comments from officials.
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