By Alberto Bacis, Goldman FICC trader
Below content item will be perceived as too convoluted, focused on irrelevant details and missing the forest for the tree. I think markets are rightly focused on the forest (European fiscal expansion and Germany finally sinking their fiscal prudence). I also think current pricing is projecting the forest in dreamland rather than on planet earth.
There was zero macro interest in European Rates space in January. ZERO. Macro folks were all about US exceptionalism. Europe provided an amazing source of breadth for macro open interest deployment. Macro folks are now all over the European fiscal expansion: same thing we saw with the US exceptionalism. Both trades are finished, over, pushed too much this week.
