“Today Is The Day” – One Trader Takes A ‘Dark Side’ Stab Ahead Of J-Hole

Jon Economy

Today is the day. Both Draghi and Yellen speak later at Jackson Hole. Although expectations for market moving news have been damped down, the market might be getting a little too complacent.
Over the past month or so, bond markets have been drifting higher on the assumption the Fed would take a dovish wait-and-see approach to the introduction of quantitative tightening (widely expected to be started in September.) On the other side of the Atlantic, investors are increasingly pricing in a slower tapering to the ECB’s quantitative easing program, believing Draghi would rather overshoot than risk pulling a Trichet by tightening and then be forced to quickly resume easing.
Have a look at the movement over the past three months of the Fed Funds futures’ curve:

This post was published at Zero Hedge on Aug 25, 2017.