XLF looking like a good long position here as a short bond proxy
If you expect an uptick in inflation like I do in the US, the Financials could be a good way to play this.
With USD down more than 10% this year, commodities having risen by more, and continued labour market tightness, inflation could surprise to the upside over the next few months and $XLF could be the proxy to play this, rather than being short bonds - which is something I don't like to do due to the negative carry. This trade could also complement a long position in USD/JPY.
With USD down more than 10% this year, commodities having risen by more, and continued labour market tightness, inflation could surprise to the upside over the next few months and $XLF could be the proxy to play this, rather than being short bonds - which is something I don't like to do due to the negative carry. This trade could also complement a long position in USD/JPY.