Goldman's Robin Brooks has to be a sadist: that is the only way we can explain his ability to crush the greatest number of Goldman clients at every possible opportunity.
First, of course, it was his call to go very short the EURUSD ahead of the December ECB meeting, which however led to the biggest EURUSD surge since the announcement of QE1.
Then, last week, ahead of the ECB meeting he "doubled down" on calls to short the EUR ahead of the ECB, the result again was a EUR super surge, the biggest since December.
And then, as we reported first thing this morning, Robin Brooks released a note titled the "The Dollar Rally Is Far From Over" in which he said the following:
Today brings the latest FOMC meeting. We expect the Fed to signal that it wants to continue normalizing policy, which means three hikes this year and four in 2017, with the statement referring to the risks as “nearly balanced,” reverting to phraseology used in October, just before December lift-off. Overall, our sense is that the outcome will be more hawkish than market pricing, in particular given that the FOMC may leave open the option of tightening at the April meeting.
Wrong on every account. But Brooks did not stop there.This is what he predicted woudl happen today:
Implicitly, our estimates for Dollar strength are largely a reflection of the divergence between our Fed call and what markets are pricing. And there is admittedly a genuine tension there. On the one hand, some Fed speakers have recently flagged the importance of financial conditions in their decision making process. On the other hand, labor market slack is steadily diminishing and core PCE is rising towards two percent. Today’s FOMC will be an important marker in resolving this tension. Ultimately, we believe that the Dollar rally is far from over.
Well, the FOMC certainly resolved this tension. Here is how:
So much for that dollar rally, and for all those who were stopped out for the third time in a row after listening to Brooks, you will get no sympathy from us. This is what we said this morning:
Given the fact that i) Brooks' calls are generally about as accurate as Gartman's, and ii) Goldman is one for six so far on its Top Trades for 2016, you might want to go with the market's view on this one to avoid getting the muppet treatment.
So to all those who once again listened to Goldman, well... assume the position.