Saxo view: Fed still looks at when to start, but there is majority if not consensus that the QE needs to end by H2-2022. This is an extension of Althea argument early in the summer: Too much liquidity means Fed needs to act faster and earlier relative to normal conditions. We see a number of Fed governors confirming this path, and this is bad news for convexity and rate sensitive stocks as the tail-wind will disappear faster. Of course, there is still overall the issue that growth and overall financial conditions is deteriorating in real economy.

Market: US stocks markets has “broken down” on charts, fixed income is starting to price “stag-flation light”. (Low growth and medium term inflation) which mean FI for now remains unchanged. (Consensus on inflation remains that its “temporary”…)

Action: Seasonality in VIX, charts, and FOMC marginal change means Volatility should be bid. Looks to hedge through buying of puts or outright buying volatility ETF (VIXM US Equity or LVO IM Equity could be used).