Iran conflict squeezes hedge funds’ short inflation bets
Rising gas and oil prices have sent headline inflation soaring with some funds being stopped out
Hedge funds have been stopped out of short positions on UK and European inflation swaps as tensions in Iran pushed gas and oil prices up, causing headline inflation to soar.
Most of the stop-outs were borne by hedge funds that were short UK inflation. Prior to the conflict, breakevens were trading well above the Bank of England’s 2% consumer price index (CPI) target, leading many to believe they
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