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📝 Recommend Exiting Short S&P 500 Positions: Citi Macro Strategy

Writer's picture: Rosbel DuránRosbel Durán

Recommend exiting S&P 500 short positions and buying 10-year Treasuries after the October CPI report. Steady corporate earnings and a rally in cyclical stocks relative to defensive sectors suggest US shares have further scope to rally in the coming weeks. Tactically, the game is changing. With no solid catalysts from now until the beginning of December, equities can squeeze higher. It’s difficult to find any bearish catalysts to temper the market.

We're recommending a long position in the 10-year Treasury space which we expect to rally on the back of slower Fed rate hike expectations. In the G10, we like the Norwegian Krone long vs the dollar.

The strongest parts of the tightening cycle are now behind us and the rates market, along with prominent Fed watchers, expect a slower pace of Fed hikes from here.

- Citi Macro Strategy


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