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The $366 Billion Short Squeeze ‘Heard ‘Round The World’
One of the more popular discussions in market circles over the seven- (going on eight-) week "everything rally" revolves around the contribution of CTA buy-to-cover flows in what I've (quite aptly, I think) described as a "monumental" rates rally.
As a quick reminder, legacy shorts across STIRs and bonds explained an outsized share of CTA performance looking back ~two years, as the Fed's inflation battle made rates a one-way, trending hawkish bet.
In November, the tide turned. You know the sto
H-Man, assuming rents/OER continue to decline which is a big chunk of CPI, there may be some legs to this long rally.