US A big part of the bearish Dollar case is that US firms and households will end up covering most of the tariff costs, which should drag on relative US…

USD: Down The Dollar is down roughly 6 percent YoY, fully retracing its Trump driven Q4 2024 surge. Against G10 currencies it has been mostly flat over the past six…

*Due to a busy schedule I am changing these posts from bi-weekly to monthly, with more content in each post* Dollar Smile Firstly, on a structural level, the current resilience…

EUR/USD: Max Pain in Q2 The last post covered market desensitisation to short term tariff risks. USD looks softer this week. Despite this, taking a larger time horizon, with significant…

The market is becoming increasingly desensitized to the threat of tariffs, as the credibility of these threats remains inconsistent. The tariff story has been front-run aggressively since November, December, and…

Yields: Key Levels to Watch The US 2-year yield is at 4.40%. A break above this level could reintroduce the 4.40%-5.00% range (the range before the collapse of the yen…

Trump Trade: Momentum Building The Trump trade is gaining traction, with odds continuing to move in his favor. ING notes that the euro is not yet reflecting a Trump victory…

USD: Strength  USD remains strong, driven by short-term rate differentials. The EUR-USD two-year swap spread has widened from 85bp to 130bp in three weeks, pushing EUR/USD toward 1.09. The Fed…

China Stimulus Markets anticipate a 2 trillion yuan ($283 billion) fiscal stimulus package, but the structure of the stimulus remains critical. Correlation with AUD & Copper Copper and AUD appear…

Dollar Smile Are global macro conditions suggesting we are moving towards the middle of the dollar smile? With China’s economic outlook stabilising and foreign investor positioning extremely underweight, capital could…

USD Outlook I don’t think this is a time to be structurally short dollars as global economy performance remains varied. While the Fed’s stance has been priced in, post-Fed periods…

Yen: Structurally Bullish The yen remains an attractive long-term position given its undervaluation and alignment with policymakers. The BOJ has no intention of intervening to stem yen appreciation, reinforcing the…

The debate around the September FOMC meeting remains focused on the magnitude of the next rate cut. Markets are currently balancing two scenarios. Here are the justifications: 1️⃣ 25bps Cut:…

Markets are in a holding pattern ahead of Friday’s NFP report. Current market pricing reflects ~100bp of rate cuts this year and ~200bp over the full easing cycle, making the…