Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.
Compounding the causal factor of the BOE’s market expectations mismatch was an epic short squeeze in the US Treasury market that largely had to do with off-side consensus positioning for a hawkish #Quad2 in Q4 (OCT) US Jobs Report:
A) The net SHORT position (CFTC futures/options contracts) in the UST 10yr note was -243,142 contracts… and
With weekly US Jobless Claims slowing to multiple Cycle Lows in October, it didn’t take a data-driven genius to expect the big ROC (rate of change) #acceleration in US labor data. I guess all of the geniuses shorted TLT BEFORE the news!