Was this a Fed scare or just “getting on with it”, or neither?  The fed did not change the path that existed for their next policy move as communicated to us after the April meeting. 

So what about all the concerns for everything that has been so inversely correlated to the Dollar which was rallying into the Fed Minutes and got a boost from the release?

As we wrestle with risk assets post Wednesday’s Fed minutes we clearly as looking to the Dollar to determine whether changing technicals to the downside can be overcome by a potentially more hawkish Fed or whether the downward sloping 200dma and pressure from reflation trades are starting to wear down this once consensus trade gone bad.


While 96 looks to be a place where the USD will fail, it’s clear that 16.00 – 17.00 is where the VIX has been failing and despite a surge on Wednesday volatility is back lower again.  The question to ask is whether the VIX is slowly making higher highs each time before it runs out of gas.  We are headed into some key events in June with the NFP release on Friday 3rd, the Fed meeting, Brexit and the next round of Chinese data.  We still believe owning volatility at these levels is not only prudent but we are starting to see the levee break…slowly.


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