JEFFERIES global economist Mohit Kumar says the firm has avoided long-dated Treasuries since July because it sees no easy exit path to the US-Iran conflict. JEFFERIES’ positioning indicators show market exposures are at extreme levels, making positioning the only current support for rates. Kumar warns that if US August CPI prints softer than expected, markets could see a reflexive short-covering ahead of the Fed meeting. US August CPI is due Friday; a Wall Street Journal survey pegs YoY CPI at 3

JEFFERIES global economist Mohit Kumar says the firm has avoided long-dated Treasuries since July because it sees no easy exit path to the US-Iran conflict. JEFFERIES’ positioning indicators show market exposures are at extreme levels, making positioning the only current support for rates. Kumar warns that if US August CPI prints softer than expected, markets could see a reflexive short-covering ahead of the Fed meeting. US August CPI is due Friday; a Wall Street Journal survey pegs YoY CPI at 3.4%, unchanged from July.