The rally we have had in bonds has occurred across the world. In Germany and Japan we have seen yield levels that we thought we would never see again. Because the omnipotent asset class to every major macro trend is always the dollar, the reserve currency had a good 2018. The yield  owning dollars. From January 2018, the dollar rallied.


Chart 2


Source: Bloomberg


The consensus was so strong for higher treasury yields and a stronger dollar that fund managers in every asset class joined the party. Whether you were a commodity trader, an equity fund manager or a wheat  dollar equivalent. As more asset classes helped convince the masses  convinced.


So the move into extreme positioning spread out and since September, all of it has to be neutered. Some positioning was not even dollar-centric but still became grossly momentum led. But most were tied in a glorious single trade across all assets knot.


Chart 3


Source: Bloomberg


5 | ADMISI - The Ghost In The Machine | January/February 2019


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