Here we are again, writes Goldman Sachs trader Bobby Molavi.
The market handing out yet another dose of exactly what investors didn’t want.
A dovish, bad news is good news and fed is done (cuts could be coming) mindset which triggered a beta rip that was felt most acute in most shorted, lower quality, higher leverage and duration space.
Macro still rules the roost…and only a week after we hit 5% for 10 year yields…we found ourselves at 4.5% on the back of easing labour markets and slowing inflationary pressure…..only to see this week yields rising once more.
And so, we see a savage, sudden and material pain trade.
