It’s not logical to position for a Fed hike next week, especially since current CME chances of it happening are just 15%, but that’s exactly what some people are doing today.
Observe the 2yr yield spiking while longer duration bonds sink.
The only reason why that would happen now, aside from a short term liquidity squeeze, is fear of an imminent rate hike. The fuckery is real.
Also, the dollar is soaring v the euro by 0.8% and 1.8% v the pound.
On the bright side, the treasury yield curve has blown out from 73bps to 92bps this week. This is a massive move and very bullish for banks. Essentially, the market is positioning for a Fed hike.
Thr chances of a December hike have risen to 53%, providing traders with somewhat of a cover for making these ridiculous trades.
It has been a long week for me, seemingly on the campaign trail, doing my duty as an American to preside over the destruction of the H. Clinton campaign.
My positioning in the market entails treasuries, gold, short FCX and cash, none of which have done well this week, save the copper turd. Markets are superfluous and always alive with misdirection and gregarious people trying to get rich. I believe, however, in the apocalypse and rather wait for lower prices, else die trying.
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Odd, considering the BoJ has a policy meeting next week that’s going to determine whether or not “reverse operation twist” is going to be a thing. This is action today suggests people are betting against it.
Traders doubting its feasibility, perhaps?
Prolly just people unwinding their flatteners ahead of the volatility next week.
Holding TLT through this nonsense did not seem risky enough. Picked up TMF at 25.82
‘No hike’ is priced in; possibility of Dec is not.
Market sells off either way.
Yellen will just remind folks of her indecisive weak leadership
Also too much, known unknown, for market to rally before election.