Trader: “There’s Pain Coming. It’s Just Not Clear for Whom”

Thursday, February 15, 2018
By Paul Martin

by Tyler Durden
Thu, 02/15/2018

It was a plea for help: as we reported on Wednesday afternoon, a macro trader at one of the world’s biggest banks virtually lost it after watching yesterday’s bizarre market response to a blistering CPI report – which paradoxically sent yields and stocks soaring even as the dollar tumbled – a reaction which makes zero sense in any rational universe – and penned the following note:

So somehow we have embraced the theme that was with us through January. On a day when inflation beats in the US (incidentally retail sales missed): stocks are up, yields are up and the USD lower does not add up. On the inflation side, that fact that Central Banks, especially the Fed, may need to be more aggressive, certainly makes some of the conditions suggested above, questionable at best. So does US curve steepening. When the layers of the onion get peeled away, EM and commodity currencies will have a lot to think about as yields push up. I completely disagree with some of the USD moves, especially AUD and CAD. Rates in the US look ready to extend. Wake up folks, it is not risk positive.

We commiserated with the author, because his frustration was logical and understandable: the various asset classes all responded in a way that made no sense when juxtaposed side by side.

The Rest…HERE

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