Specs Long 2y Futures 1st time Since 2018. WHY?
This mornings institutional recon offered a link thru to updated POSITIONS report which details that speculators are now LONG 2yr (futures) for the 1st time since 2018.
It doesn’t speak to WHY. One MIGHT suggest they have simply booked some profits from short positions in advance OF what may / may NOT be a SepTAPER
AP reported Rosengren SAID: Fed should begin slowing stimulus efforts by fall
Any / all of the positions taken and narratives OFFERED in light of Clarida-fication LAST week must be done so in context of TOMORROWS CPI …
I detailed how Used Car Prices are set to fall and there’s clearly an impact on CPI while at the same time there’s plenty of focus on Owners Equivalent Rent (OER). Whatever your VIEW there does seem to be solid logic behind a yield curve flattening trade (detailed in this mornings VIEW) with this visual courtesy of Nordea
Whether or not HAWKISH is BULLISH (see rates from Mid-MAY forward) and the bond market sniffing out something GLOBALLY (this weekends VIEW) remains to be seen …
This is clearly the direction I’m leaning and if/when STOCKS sniff this out, trade down (5%, 10% anyone?) 10yy will be closer TO 1% (perhaps below) than 2% as is current set of prognostications … Staying tuned.