Inflation Expectations Are About To Give An Important Signal - Weekend Macro Press

Key Tactical Takeaways: > Although CoT positioning still favors a higher bias over the weeks ahead for assets tied to the inflation trade, copper, loonie and kiwi seem most vulnerable to ...

> After reaching the highest levels since July '19 this past week, the 5-Y, 5-Y Forward rate is at a point where it must accelerate higher without hesitation or risk rolling over into multi-week mean reversion.

> It is recommended that any rally to the USO ... area be used to take some profits, since the concern is that oil prices will not be able to forecast beyond this winter's Covid demand slump like stocks can.

> The $ looks to have some key ingredients in place to stage corrective rebound after a final sell-off this week. For this to occur, however, settlement > DXY ... is needed. In the meantime, stay long EEM against 49.8.

Market Outlook: In the coming week, all eyes will remain focused Washington politicians and their efforts to craft badly needed new fiscal support for the U.S. economy, and ...

Technically, the benchmark S&P 500 and key market-based measures of inflation to be at a critical juncture. When it comes to equities...

My highest conviction ideas for the coming week regard commodity currencies NZDUSD and CADUSD, along with copper. Considering the historic net-short position in copper on the part of hedgers, along with noticeably tired upside momentum and mature wave structure, the stage seems set for neutral-to-bearish strategies to benefit in the next 1 - 2 weeks. Although hedgers are not showing extreme net-short interest in commodity currencies, kiwi and loonie to have mature bullish wave structures that look poised to mean revert lower.

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