Big short in US 30y bond – the pre-US election trade? Our US rates strategists expect the 30y bond yield to rise further as investors price in more optimism around fiscal stimulus (before or after the election). Last week futures traders turned the most net short 30y US Treasury bond futures contracts ever, so the question for FX traders is whether higher back-end US rates are bullish or bearish for USD versus risk pairs?
In G10 FX, the market remains short USD and has increased short positioning in the past week. FX options markets are long EUR, JPY and NOK, and small short AUD and NZD: .
Record short USD position among asset managers In recent weeks short-term speculative traders have taken profits on long EUR/USD via futures and options as the pair stabilized around 1.18. Sentiment appears to be shifting again to a more bearish USD stance, with only 36% of futures traders bullish USD now, after almost 55% two weeks ago. However, the near-term volatility hasn’t deterred asset managers, as they now have a new record aggregated short USD position (36% of open interest, Exhibit 6), most emphasized versus JPY and EUR
Hard to determine if today is a stimulus type Macro trade today as Bonds sideways, due to cash markets being closed. Front running amazon prime day Apple 5G announcement tomorrow is lifting FANNG
italian 10 years near all time lows,Monthly Chart
Italian 30 year yields all time lows Monthly Chart