Honestly I think September CPI is gonna surprise to the upside. #CPIWatch
Look, oil has been stuck above $100 for a reason. Brent is around 103-104, WTI around 90. All those tanker attacks near Hormuz aren't just headlines, they actually push US gas prices up. And that goes straight into CPI.
Consensus is 3.6% yoy vs 3.4% last month. I think we print at least that, maybe 3.7%. Core is sticky too.
If that happens, the market will immediately price another Fed hike again. That is already what most Fed speakers have been hinting at. And yields are already crazy high. 10Y hit 5.36%, 30Y hit 5.73% last week. Now it's cooled a bit to 5.19% and 5.55%, but one hot CPI and we're going right back up.
So my play going into Wednesday 8:30am report:
I'm long BZUSDT. If oil holds $100+, this thing has room to $108. If CPI beats, momentum will push it there fast.
I'm also against long duration bonds. I'm short TMFUSDT / long TBT instead. Long bonds at 5%+ yield with inflation re-accelerating? No thanks. I parked some cash in RWUSD to stay flexible after the print.
I attached a real Brent vs US10Y chart from TradingView, you can see they move together since October. No AI stuff, just actual price action.
I could be wrong, maybe CPI comes in soft and yields drop. But with Middle East still messy, I doubt it.
What are you guys doing? Long oil or buying the bond dip?
