FXKnowledge chief strategist ACF early Q1 update

FX Knowledge updated macro thoughts:

Important Developments early this year validate our bullish JPY call and confirm a USD bearish m/t outlook.

This has been a busy start to the year for the global market, with the sell-off in the bond market very much in the limelight as the US Treasury 10 year bond yield is pushing back towards last March’s high of 2.6277%.

On the G10 FX front, the JPY is a winner early this year (which bodes well with our December 18 2017 ‘Q1 2018 G10FX Investment Themes and Strategy publication: ‘We still like the EUR, but the JPY could be the ultimate winner’), whilst the equity market is looking a little more vulnerable as monetary policy normalization (and potentially the US debt predicament) become more of a dominant market theme.

Bottom line is that we believe that the recent move higher in US bond yields i) has room to go further and ii) it is not necessarily a bullish development for the USD in the current context.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *