Russia’s invasion of Ukraine has upended several popular trades, inflicting heavy losses on investors bullish on European stocks and the euro and also those bearish on the Japanese yen and government debt.
“We just experienced a major pain point: the Russian invasion. That was enough to flush out the more aggressive short term positions”"said Aaron Hurd, senior portfolio manager, currency, at State Street Global Advisors in Boston. Meanwhile the growing trend to bet against the dollar -- long dollar positions slipped to the lowest since August - also backfired, as the dollar index jumped to a mid-2020 high.According to a BofA monthly survey, European stocks were investors’ most preferred region with investors a net 30% overweight.
As risk aversion takes hold, the price of put options on European stock indexes at 10% below current levels for contracts expiring in March has jumped sharply. Open interest - the number of contracts outstanding, is at the highest level ever.Convinced that the U.S. Federal Reserve would go big and fast with interest rate hikes in coming months, traders had piled on bets against Treasuries and most major bond markets.
More Fake News from socialist Globe and Mail. Toronto and Nasdaq were up today.