Expectations for a 0.1% MoM drop in CPI has set the squeeze-algos on fire in recent days as the small drop signals ‘peak inflation’ and goldilocks and a unicorn-filled Fed will step back and declare victory (with a lag). Short-term interest-rates – however – have not been buying that dovish story, so how the market reacts to today’s print will be fascinating given the technical background of extreme negative delta and positioning, and now momentum.
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