Buy 10-Year T-Note leading up to March rate hike

A quarter point raise is already priced in. A half point raise could have the opposite effect on the long end of curve because it would likely be taken as a deflationary surprise for future growth and a stronger than expected stance against inflation, which could cause de-risking flows from stocks to bonds. The result is an asymmetric trade opportunity due to the expected outcome already being priced in and the "surprise" outcome potentially resulting in a favorable movement.

Watch for resistance around 2% yield and trendline break in lead up to March FOMC meeting.

Comment:

The expected outcome is now a half point hike so this changes things: www.cmegroup.com/tra...untdown-to-fomc.html

Comment:

Game on