I think over the last two weeks, we have seen markets moving in the “direction of pain”. For over a year “long dollar/long bonds” trade ruled supreme. I think those who fought against it were forced to give up early in 2015 and many doubters at last jumped on the trend. I don’t see any major new economic challenges to the thesis, but the positioning, as I feared, has become vulnerable.

I still think continuing QE will cap European yields in the long run and provide support for USTs as well. But short-term price action is very uncertain.

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