Risk assets and inflation hedges are in decline as the Federal Reserve prepares to accelerate its QE taper, paving the path to a rate hike by mid-2022.
Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger France 40-bearish contrarian trading bias.
Market sentiment is broadly neutral as the Omicron coronavirus variant spreads and the FOMC meeting looms; traders will need to be careful until this week’s central bank meetings are over.