CPI – Red or black rien ne va plus

Posted: February 14, 2018 in Uncategorized

Everybody is waiting anxiously the CPI data released in the US.

A good data (inflation lower than expected) will spur the market into a consolidation – a bad data will restart the sell off.

Also tomorrow is option expiry date that can induce more volatility.

In the last year inflation in January (the one that spooked the markets) was always overstated – but they changed the basket. So there is no way to know.

In the market yield are consolidating, but a lot hedge funds are taking position for a sell off (mind you hedge funds can be wrong or just hedging.. A Citi released showed that hedge funds went fully long 25th January.

Street is looking at 0.2% as a good number (y/y growth 1.7% vs 1.8% December.

On 70 economist interviewed by Factset, only 6 see a 0.3%.

Goldman Sachs is saying buy the dip, Bridgewater Associates (largest hedge fund) says please do not even think about it.

It is really a bet.

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