Mad March Hares

Goodbye February, hello March. And with March come the Mad March Hares. The term Mad March Hare reflects the scatty, testosterone-driven behaviour of the male hare when winter comes to an end. We reckon that we will also see them appear in the financial markets. This year has apocryphally seen Jan and Feb as a particularly hard winter for returns and the start of March for many is seen as a chance to mentally wipe the slate and start again with more gusto.

As we peer across the dank grey markets we think we can make out the following Mad March Hares starting to cavort about

First Mad March Hare is today's craze for quoting statistically sculpted quotes about how the Saudi stock market hasn’t fallen this much in x time since (insert last time it happened). Whilst TMM are as worried as the next person about the consequence of Saudi blowing up, we feel that inciting global panic on the back of stock market movements and two day old dubious stories involving tanks on lorries going to Bahrain is gauche. We would like to put it in some perspective. Here is the chart of the Saudi stock market over the past 10 years.


These sorts of moves are NOT unusual. Perhaps a market that has been running on Middle East stimulants for the past month is missing a fix in today's otherwise quiet times and is looking down the back of the General's Armchair for something to smoke. As for the Armchair Generals themselves - there is a lot of googling of "Saudi stock market" going on in the background.

Short the 5yr UST - After the past month's squeeze higher, it looks as though punters are looking to get ahead of expected strong macro data over the next week or so. Traders are sensitive to pattern recognition, and if the first week or two of February is anything to go by, TMM will not be standing in the way of that one. Readers will recall that TMM are strongly of the view that the Fed will not be raising rates until mid-2012 at the earliest, and will look to buy into the front-end dip after the data dump sometime next week.

Long Equities - The first cry of the month is "look at the inflows". Equities have survived a harsh February with Middle East insurrection and an oil shock, but here again, pattern recognition is the name of the game, with punters front-running real money inflows yesterday and expecting a strong day today too.

TMM's own Mad March Hare. Selling AUD/NZD .. TMM should have been braver and paid March RBNZ OIS rather than yet again trying to fade the AUDNZD rally, as the former backed up a few bps, while the latter landed them with another small loss.

We are sure there are other Mad March Hares out there and look forward to hearing from you if you have spotted any.

One last thought - We have all been watching the latest interview that Jeremy Bowen of the BBC conducted with Gaddaffi. Apart from wondering if Mr Bowen was exposed to the same level of flatulence John Simpson was subjected to the last time they got to interview the man, we wonder if an exploding Jeremy Bowen would have been a small price to pay for swiftly ending the Libyan situation and saving many lives?