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IPFS News Link • Federal Reserve

"Eurodollar Whale" Bet On J-Hole Policy-Pivot Explodes Ahead Of Jobs Print

•, by Tyler Durden

Bloomberg's Edward Bolingbroke was the first to highlight the massive ED trade by an unknown entity, who appears to be betting that the Fed's dovish stance will end with a bang not in June, as many analysts predict, but in August with Powell making the inevitable taper announcement at Jackson Hole, which will lead to a bloodbath across the curve and especially the short-end.

Why Jackson Hole?

Because last year, Powell unveiled a new policy framework for inflation, while in 2012 Ben Bernanke signaled more bond purchases were on the table.

Since we first noted it, there has been a burst in eurodollar options activity involving a position that will benefit from this potential ramp-up in taper rhetoric in August, and Nomura's Charlie McElligott notes that, ahead of tomorrow's much-anticipated payrolls print, there has been a dramatic increase in the 'eurodollar whale' position.