The dust has settled and we can now identify medium-term moves
Inputs: - Rates revised upward for next year - Inflation is a major problem - The Fed doesn't control inflation and can't get it under control quickly - Rates will remain high for some time - 4.5 expected by year end then February 4.75 and will watch.
* No dollar reversal is essentially expected until February 2023 (current expected end of rates rise cycle). * The theme is simple - risk off is a major theme in the markets * The FED is willing to sacrifice both the labor market and development for now to fight inflation. * Hint - until the inversion is overcome no risk inclusion is expected.
Comparing 1974 and 2022 are the two closest (expectations for exhausting sideways) in line with corrective structure imo
Shares = Watch for real yields (when they start to fall is one of the signals) = Watch the ratio of durable goods to daily commodities = Watch the spread between junk bonds and core bonds.
Old proverb in action - "Do not fight FED" and rare fund will, N!B! this. Trade safe and wise.
Not legal and financial advice; Any information provided here is only the personal opinion of the author.
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IG prints retail are extremely short DXY again. Imo it is wrong side.