As discussed in Friday’s piece, I expect the USD to consolidate, not accelerate lower from here. This despite falling inflation and Brainard at 1130am.
Today I look at huge moves in EURUSD and USDJPY and what happens next.
The downdraft in crypto on the back of FTX worries is likely to find global macro relevance soon if things don’t turn around there soon.
The current macro narrative is not particularly lucid. You need to make a call on China reopening to be fully invested right now.
Given all the layoff announcements in the past few days, I don’t think this US number is strong enough to be worrisome. NFP is backward looking. It’s more important to see where Initial Claims go in the next few weeks. Anyway, it’s all about China today. Let’s see if that lasts.
Yesterday’s FOMC was not the quiet nothingburger I had expected. Tail risk is back in bond volatility and RHS USD moves.
Does not bode well for my BRL view but the data will ultimately decide what’s what, not Jerome Powell.
This cycle looks a lot like 1994 and 2018 and you should not expect generally bullish year-end equity seasonals to apply to this year.
There is so much data between now and the December 14 FOMC meeting. That data is more likely to move terminal Fed Funds than this week’s November FOMC meeting.
It is hard to imagine that Fed leaked a dovish article 10 days ago and a hawkish one yesterday but maybe I’m naïve.
• Looking at a couple of recession indicators.
• General thoughts on data: QoQ, YoY, real / nominal, leads and lags.
• SPX long was better than USDNOK short.
An update on the Magazine Cover Indicator and some quick thoughts on BoC and BOJ.
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