Which assets are most correlated to the USD?
The U.S. dollar (USD) has weak correlations with major U.S. equities like the S&P 500 and Apple 💵 Source: @OANDA and Visual Capitalist https://lnkd.in/eFccw27e
Russian Ruble is imploding 📉
Source: Barchart
The similarity between the Dollar rise since the election and what happened in 2016 is uncanny.
In both cases, the Dollar was by this point closing in on a 4% rise, with an ultimate rise of around 6% by the end of the year. So - if 2016 is a guide - there's another 2% to go now. Source: Robin Brooks
🚨 The “Euro swap cash basis” is negative for the first time since its creation in 1999.🚨
👉 It reflects the difference in cost between borrowing money in euros and the cost of swapping it to another currency, like U.S. dollars. 👉When it’s negative, it means borrowing in euros and swapping it to dollars is unusually expensive or difficult. 👉The fact that it’s negative for the first time since 1999 suggests that dollar demand is at an all time high🥤 Source: BowTiedMara @BowTiedMara
Ahead of US elections, Yuan’s overnight implied volatility is going through the roof
Source: David Ingles, Bloomberg
Net long positions on the Japanese yen hit ~45,000 last week, the highest level in 3.5 years.
By comparison, in early August, speculative positions reached net short ~180,000 contracts, the most in at least 20 years. The las time such a sharp reversal from short to long occurred was during the 2008 Financial Crisis. This comes after the Japanese Yen has strengthened against the US dollar by 12% since July as the carry trade has scaled back. The $USDJPY pair is flat year-to-date and is trading at its lowest level since the first week of January. Japanese Yen volatility is still here. Source: The Kobeissi Letter
Morgan Stanley's CIO Michael Wilson says "yen carry trade risk lingers for US stocks"
Source: Bloomberg
Yen's strength pressures earnings
Source: Bloomberg
