Flipped my positions. Booked profit on euro short and went long. AUDUSD short closed out. Shoring the dollar. I got the pullback I was expecting last year and expecting a rollover now. By the way, I have been short 10y bonds for few months (from last year ) and they are pulling back now. I'll be selling more at higher levels. Bunds and gilts also played out nicely. This is far from over! It all boils down to your favourite dxy.
My bias = short the dollar. Levels marked on that chart #forevercontrarian
Yeah with volatility kind of leveling out, if we have some kind of spike in the MOVE index, we could see those bonds sell off. It seems like there is a lot less space for them to go down tho. I havent shorted 30Y bonds in a couple weeks just cause I could see it go either way from this point.
Ironically, you might be a contrarian here because so many people are deflationist but thats literally the consensus trade on the street lol.
but seriously tho, love the charts and commentary
True. But in my eyes party just started in bonds. Yields are going higher. Forget the fed noise. They can do whatever they want, but the market is bigger than banks. We’ll have pullbacks on the way but bonds have a long way to go. My base case is that risk parity gets annihilated in this decade.
As per my post about stealth Fed YCC, although I'm still short the 10 year I'm worried that 'fighting the Fed' is sort of what I'm now doing and if they are quietly trying to stabilize/push rates back down this could be a few more weeks of consolidation. Of course with all this good reflationary reopening news coming out (ISM services at highest level ever) and the numbers getting better it could mean another leg up for rates. I mean the buyers are just not there and there is a ton of Treasury issuance upcoming.
@Gary Grewal Yeah I agree that the market is going to do what the market wants to do. But i dont think this is the beginning of the bond bubble popping. Maybe tho.