Me and just about everyone else on the planet who follows these things has pointed out the fact that the dollar has lost track of the reflation narrative in the new year and especially following the inauguration.
Sure, we got some greenback strength on Friday and yields came down on Thursday following a decent foreign bid at the Treasury's 7Y auction, but generally speaking, the story has been "divergence."
There have been no shortage of attempts to try and explain why one leg of the reflation trinity seems to have come off. Certainly Trump and his inner circle have contributed with "inadvertent" verbal intervention.
Still, we lack a definitive answer and no doubt we'll all be interested to find out what the new positioning data says about USD longs.
In any event, Bloomberg's Richard Breslow is out this morning with his take, which you'll find below.
Via Bloomberg's Richard Breslow
(Bloomberg) -- Creating almost as much interest as the Trump trends, and their forecast longevity, has been the curious case of why the very neat correlation between U.S. Treasury prices and the level of the dollar hasn’t been working so well. This is a big deal for a whole host of reasons. N
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