Positioning Watch – All about the soft landing narrative
Hello everyone, and welcome back to our weekly positioning watch, where we as always try to dig down into the latest positioning data and give you an overview of what’s moving narrative currently.
Sentiment and positioning are still skewed towards hopes of a soft landing, with bets being placed on lower yields, a weaker dollar, booming equities and almost non-existent credit spreads – ironically a prime condition for an upcoming recession (which is still our base case for H1 2024).
General media and story counts are also all about the soft landing vs recession, with the mentionings of “recession” back at pre-COVID levels, while soft landing counts are on the rise, although pulling a bit back from recent highs.
Chart 1: Story counts, Soft landing vs Recession
With CFTC data delayed due to Thanksgiving, we turn our attention to fund flows and sentiment data to see how the soft landing narrative is impacting positioning.