TL;DR
December hike stays base case with the strip near 20bp; I ride the front end while the 2Y holds above 4.65% (structural, months).
The strip is +25bp too rich versus the rules and only pays if core PCE runs at 2.91%; I keep fading it (structural, months).
Duration is a broken equity hedge with SPX-10Y at -0.07; I buy downside in options and leave bonds aside (positioning, days to weeks).
HY upside chased at the wide end of spreads is where the squeeze sits if risk turns (positioning, days to weeks).
Gold grinds lower with downside hedges crowded at the 93rd percentile; the view holds while it fails to reclaim higher ground (positioning, days to weeks).
Where We Stand
Yesterday I said the December hike stays my base case and I ride the front end until the 2Y closes below 4.65%, and today does nothing to shake that. The oldest open thesis, the one from four days back, is that the strip prices too many hikes and core PCE settles it. Core PCE landed in line at 0.3%, so the thesis is INTACT and the 2Y sits at 4.7%, ABOVE my 4.65% line (structural, months). The strip is priced +25bp beyond what the rules justify, and it is only right if core PCE runs at 2.91%. I keep fading that gap and I stay with the front end. The HY crowding flag is still live, and the SPX-10Y decoupling flag is still doing its work.