Tariffs are here, and the market does not like it. But whether or not you agree with the prevailing view inferred from positioning, it probably isn’t wise to lean against it, at least not yet. For the nimble, volatility and position unwinding will ultimately open up significant tradeable moves.
Traders and investment managers are positioning for higher inflation and weaker growth. The net long position in Treasuries is rising sharply, while positioning in short-term rates futures is becoming very net short. Dollar and gold longs are near highs, while the net long in stocks is falling, yet still has plenty of scope to drag prices lower.
