The EUR found its breaking point. OPEC dictated its breaking point and the USD bear’s were just broke. All the asset classes turned on a dime yesterday once the USD found the sweet spot. The dollars strength was driven by the US yield curve. With stronger global growth rates being announced by China (+8.9%) and South Korea (+2.9%), it was only a matter of time that Yield curves would begin to reflect this. We have the Fed meeting next week and capital markets continue to expect a sign of an exit strategy from policy makers. The stronger than anticipated US earning season is now being priced in by the bond market and providing support for ‘a stronger dollar policy’! Being the contrarian, what if yields are rising in anticipation of the ending of several Fed programs? One needs higher yields to attract Capital! Are all company earnings priced in? Are they based on incentive programs or inventory clear out? It’s somewhat surprising to see the Fed policy makers talking the USD up...
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