This AM the Dollar giving back from yesterday’s reversal and continues trade lower. Amazing to me how everyone quickly jumped to more sensational reactions yesterday on how Fed was back in play. How about that the Dollar was very oversold on short term basis but still overbot? Stay with “95 before 110” on DXY. We are still playing this out.
As goes the Dollar as goes volatility and risk assets. After Whirlybird said the Dollar had room to weaken (sort of) we got validation of the call we made BEFORE the Fed: “95 before 110” was the trade named (see Emerging Money last week).
As the Fed gathers this morning a quick look at the DXY, now two days into a pause higher, tells me there could be more of a trade here that is more than just two days.
Emerging Money Audio Call March 12 – On the call today we discuss a pullback in volatility as the Dollar runs out of gas but the question is for how long?
I’ve been harping on European equities since late December. I have been right. But guess what, things have gotten even more lopsided in favor of EU allocations. If you are buying today, you don’t have the last 15 big figures lower in the Euro (or 12%) working against your USD based investment.
This morning’s price action in natural gas dropped over 4% despite last week’s draw of 228 billion cubic feet against analysts’ expectations of 222 billion cubic feet and 144 cubic feet the prior year.
Today is an extraordinary day for macro driven by the U.S. Payroll number that many thought could be weaker based on recent weather conditions.
There are plenty of shrills piling on the poor 1Q numbers by Joy Global this AM before the market opened. I have to wonder when the “masters of the obvious” will acknowledge that we didn’t learn anything new today from JOYG that we didn’t price in 3 months ago.
As we mentioned on the call we want to highlight where emerging markets are looking at potential tests of the mild up channel we have been in since December global market lows, as well as pointing out that emerging market equities are challenging the important .1900 level on the “EM/DM spread.