Quants exit USD 100 billion of inflation bets in big market shift

Fast-money traders have just unwound about USD 100bn of bearish stock-bond bets, helping the world’s biggest markets to recover from the worst first-half in history.

Photo: Spar Nord/PR

In the past month, so-called commodity trading advisers (CTAs) have offloaded big short positions that were built around the idea of soaring inflation, according to analysis conducted by both JPMorgan Chase & Co. and Nomura Holdings.

Strategists believe those liquidations are stoking the recent revival in US equities and Treasuries. These trend-following quants -- who take long and short positions in the futures market, typically with leverage -- aren’t setting the direction of markets, but are adding fuel to recent moves.

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