Terrific stuff from Charlie McElligott at Nomura.
Seeing further and modest continuation of slow but “wrong way” price-action in a number of popular Macro positions, as “Short USD” expressions continue their recent bleed while the Dollar squeezes incrementally higher again—EURUSD is leaking and approaching a break of 1.08 to downside (European data downside surprises slowly accumulating), USDCNH is screaming topside towards 7.05 (Chinese data downside surprises en masse), USDJPY is at highs since Nov22 (Japan looking like a “hiding place” for investors, with NKY pushing back towards 1.5 yr highs and melting-up and now seeing hedgefund “pile-on” late), EMFX lacking (EMFX basket below 200dma for first time in 2 months), and all while Gold and Bitcoin are both struggling and losing momentum as well.
In conjunction with USD’s squeeze, UST Yields are also leaking higher, which is at least a partial function of yet-another monster week of IG Corporate issuance…but we are also too sensing a shift in “debt-ceiling” sentiment, where a number of credible DC consultants are voicing some positivity around an actual “deal” getting done, as opposed to the prior “best case” expectation being a continuing resolution “kick the can” scenario, where the odds being priced incrementally lower.
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