James Brodie
Head of Learning & Development, Flux
S&P Rallies Amid Short Squeeze, Trump’s “Two Amazing Days”, LNG Rewired
S&P nears highs on short squeeze; gold up, dollar down. Inflation rising, funds bearish, LNG flows shift as US fills Qatar gap
The S&P rallies to within 0.5% of a new all-time high as shorts get squeezed, it’s up 9.83% in the past 10 trading days, for the best 10-day gain since coming off the COVID lows in March 2020.
Gold continues to rally above $4,800 with the dollar aggressively lower.
Hedge funds continue to aggressively cover their short positions, after their net positioning had broken below Liberation Day lows. Hedge fund short exposure in US-listed ETFs fell -11.5% last week, the largest weekly short covering over the last decade. Goldman Sachs also estimates CTAs still need to buy $43.5bn in a flat tape over the next week, the largest buying spree in over a decade, despite the ongoing conflict. (Chart 1, CTA positioning in U.S. equities, Goldman Sachs)
Bank of America fund manager survey is the most bearish since Jun'25 (Chart 2, BofA Global Fund Manager Survey). They also note long oil & long global semiconductors are tied for #1 most crowded trade. Also, growth expectations dropped to the lowest since August 2025, and inflation expectations hit the highest levels since 2021.
Trump says he doesn’t think extending the ceasefire will be necessary, hints at “an amazing two days ahead”.
US March PPI inflation rises to 4.0%, its highest since February 2023. Inflation is back.
US households have 52% of their financial assets in equities. The highest level ever recorded.
IMF chief economist Gourinchas: severe scenario will put some economies into outright recessions with global inflation above 6% and inflation expectations hard to contain
IMF urges members to be prepared for market dysfunction, liquidity squeeze. IMF warns of 'forced selling' of leveraged bond holdings if rates rise.
The UK government concluded an auction of its 10yr gilts, and they are paying the highest yield in 18 years. While the IMF says the UK faces biggest hit to growth of G7 advanced economies from Iran war.
The LNG market rewired and this is the new map (Chart 3, Aurora)
Feb 2026 → Mar 2026:
Qatar: 8.4 bcm → 0.4 bcm. Essentially gone.
US: 13.1 bcm → 15.7 bcm. Filling the gap.
Australia: 8.7 → 9.3 bcm. Picking up scraps.
Europe: still receiving 11.9 bcm. The flows didn't collapse. They just rerouted straight to American exporters.
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