Time and again I’ve emphasized the importance of watching cross-asset correlations and positioning data as barometers of the “Trump trade.”
Essentially what you get by observing these correlations and by checking up on CTFC positioning is a running referendum on the extent to which the market is still buying the reflation narrative.
In correlations: +correlation between stocks, rates, and USD = reflation on. Anything else = narrative wobbling (subject of course to any number of contingencies including whether dollar strength is performing its new role as reflation cheerleader or its more traditional role as a drag on commodities and thereby on breakevens).
In positioning: short USTs, long USD = reflation on. If those positions are meaningfully trimmed = narrative wobbling.
With that in mind, consider the following set of charts from Goldman.