Don’t Bet On December Taper

Takeaway: Market signals matter a lot more than consensus "economists."

The 10-Year Treasury yield is down a couple beeps to 2.84% today (and making a lower-high versus the year-to-date high in September, when Bernanke went no-taper).

Don’t Bet On December Taper - benfed

 

If I handicap what the bond market thinks, versus consensus “economists” (Bloomberg survey just doubled from 17% on December-taper to 34%), it’s still no-taper. Incidentally, there’s a -133,201 net short position in CFTC futures/options on the 10-year.

 

Don’t Bet On December Taper - dra1

As far as the US Dollar is concerned, it’s down four straight weeks as Fed Overlords continue devaluing America’s currency. The Euro continues to breakout versus USD. So on the margin, the currency market thinks no December-taper too, despite there currently being a bigger net long position in USD than EUR.

 

This is a brief excerpt from Hedgeye research this morning. For more information on how you can become a subscriber click here.