Wednesday 9 May 2018

Fading consensus trades over the summer

Oil is up about $30 since last June and is probably a fade from here for a few months on high supply levels. USD rally recently should also subdue import price inflation. Just need some weaker growth numbers for a lot of consensus macro trades to be run over during the summer. Political problems in Europe or China slowing headlines could also be a catalyst.

Long EM has already been run over by the USD rally. But long oil and short bonds, long equities, in paricular European ones stand out as vulnerable to me. 

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