The excellent Charlie McElligott at Nonura on how investors are ducking the crazed robots of the equity market.
After the monster China PMI upside prints overnight (Manufacturing PMI rose to 52.6 last month @ the highest reading since Apr 2012, while Non-Manu also beat, jumping to 56.3), this roll-over in US Dollar reiterates exactly why I called “time-out” in Monday’s note on the re-pricing higher in US Rates and USD which occurred over the course of February.
There certainly is a renewed receptivity from clients to take another look at *TACTICAL* “Long R.O.W. / anti-USD” trades via Options at the moment, taking advantage of the more attractive entry point after February’s US Dollar short-squeeze which occurred alongside higher UST Yields via the “US Economic Animal Spirits” = Higher for Longer” dynamic which finally began roiling cross-asset markets over recent weeks.
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