The dollar correction is in full swing, it’s what I’ve been expecting, but I must confess to some disappointment in my timing! Even a stopped clock is right twice a day as they say. The fight against the greenback was given added impetus in the aftermath of the FOMC minutes being published last night, so I’ll focus on the minutes to begin todays blog.

It appears some members of the committee were concerned that their recent guidance is vulnerable to misinterpretation. Specifically, now that asset purchases are ending this month and their employment targets are largely achieved, the market is assuming rate rises next year… indeed the only point of discussion appears to be which quarter of 2015 will see the first rate hikes. There was a desire from some members to ensure that financial conditions are not prematurely tightened, and a part of this relates to the strength of the dollar, and also the rather dismal economic news we’re all seeing outside of the US. For my part I don’t envy the Fed members, they have acquired a massive balance sheet that will lose a tremendous amount of value when rates go up. The bottom line is that over the next few meetings the Fed will go through contortions to find the right wording to fit the current circumstances.. a situation where the US economy is doing well, but is potentially vulnerable to a slowing Europe and China, and to an appreciating dollar. They will be keen to convey an intention to tighten policy if.. and only if.. inflation becomes a problem, wage growth starts to pick up, and of course the US economy continues to grow strongly.

But, even if there’s no active intent to tighten financial conditions in the US, we know that the ECB, if anything, wants to find a way to ease conditions in the Eurozone. So in our view, this rally in EUR/USD cannot go very far. It is a correction of a bearish trend, and as I’ve said before, it is a necessary condition for trends to remain sustainable. From a technical perspective a rally up to the low 1.28s may be sufficient. At those levels I become cautious, and my expectation is that EUR/USD is likely to turn lower again, or at least it could struggle to get much higher than that. I would be similarly cautious about the recent bounce in EUR/GBP, it’s conceivable it might go as high as 0.7950 in the next few days, but there again, I see the euro as too vulnerable, and the currency pair is susceptible to fall back into its recent trend decline. These next few days should be great for sellers of euros, it might be some time before such a beneficial opportunity comes around again!

Other currency pairs have experienced similar moves – appreciation vs the dollar – over the last few days, and in general I would be cautious about how far their moves can go as well. USD/JPY might be an exception, but I will need to do a bit more research to understand the dynamics in that pair. Some of the comments from senior Japanese officials in the last week, have appeared hostile to further yen depreciation, but again.. these comments might just have been focussing on the pace.

Emerging market currencies like the South African Rand and Mexican Peso, if anything, saw even more aggressive appreciation against the dollar following the minutes, my guess is that there have been traders steadily accumulating short positions in these types of currencies in recent months. Those chaps are probably sitting at their desks this morning wondering where it all went wrong. Still I doubt this has led to outright losses for them, it’s more likely to be a significant reduction in their profits on the trade. The question needs to be asked though.. what happens to these currencies now? This is a different question to the euro. If the Fed is telling us to be more considered about when rates will need to be hiked, do we need to be as concerned about the financial stress Emerging economies are likely to experience? In my view, yes. It’s going to happen, rates will go up, maybe a bit later than the market has anticipated until recently, but as sure as taxes, they will go up. We should still have the same concerns for Emerging economies, laugh in the face of anyone who tells you that this time it will be different, it might not be an Asian crisis, or a Tequila crisis, but there will be some crisis, so some caution is warranted, we should just be a bit more discriminating this time as there are economies out there, which are still called developing that really aren’t!

We have the BoE rate decision today. Don’t expect much there. Perhaps more members will consider the possibility of hiking, but if the FOMC is any guide, the recent data out of the Eurozone might temper their positive view of the British economy’s prospects next year. Not much else to look forward to today, but really… isn’t all this enough?

So Draghi announced his plans to purchase asset backed securities yesterday at the Naples meeting. But first I should start by just mentioning that rates were left unchanged – it’s not like they had much room to do more with that policy lever anyway! The overall impression was that the plan was vague. There’s no hard number in terms of the size of the purchases, and the ECB Governor appears to be backtracking from expanding the balance sheet of the central bank by 1trn euros. The net result? The euro rallied after his speech. From about 1.2615 when the ECB was all everyone was looking towards, EUR/USD bounced as high as 1.2690 before starting to tail off again. Analysts believe the hawks in the council won this battle, preventing the doves (Draghi included) from announcing anything too specific and bold. For now, the market has no choice but to doubt the ability of the central back to stop the balance sheet from continuing it’s gradual contraction. We’ll know more in November, but there doesn’t seem to be the requisite political support for the type of programme that would guarantee they achieve Draghi’s aims, you need France and Germany on board, and neither seem to want to play along.

Price action yesterday wasn’t just about the euro however. In the bigger picture the dollar weakened across the board. USD/JPY has been particularly interesting, with the possibility that we’ve seen the highs on that pair for the next few weeks, and possibly months. In addition to this, or perhaps because of this we also so swings in the equity markets with the S&P making a low in the late afternoon (a roughly 4.6% decline from the recent record high), before later making a recovery of sorts. Generally we’re continuing to see mild reversals from the extremes of yesterday this morning as positions are squared in front of the big data out this afternoon. For those who don’t know already it’s the first Friday of the new month which of course always means we get employment data out of the US. Employment growth, and more specifically earnings growth remains key to the Federal Reserve’s decision making process. While the employment data has been decent all year, members of the Reserve Board are unlikely to view the recovery as sustainable until workers are able to bid up wages, and thus boost demand in the US economy.

This morning we also expect retail sales data for the whole Eurozone. The expectation is for a slight decline in the year on year number, albeit growth is still anticipated. Disappointment here will do nothing to aid the health of the single currency. I must say that I’ve been expecting a recovery of sorts in EUR/USD for some time now, and it may yet happen, but it’s remarkable how resilient this trend has been to date. As I’ve mentioned before when both sides of the pair have themes backing their respective moves it’s hard to slow the trend.

The stage is clearly set for dollar strength to continue. In the FT this morning I see articles about the United States becoming the largest petroleum producer, surpassing Saudi Arabia (no need to worry about trade deficits then!), intervention in New Zealand to weaken the currency, and reports about Emerging currency woes. All of these items support the strong dollar thesis, as does the weakness of commodity prices.

In previous blogs, I’ve opined about the expensiveness of equity and bond valuations, well… if there’s one thing that can help justify those valuations, it’s cheaper commodities. Cheaper commodities imply a lessening of the inflation threat which is good for bonds. It also implies cheaper raw materials – good for corporate earnings, and higher disposable income – again good for corporate earnings. Perhaps we need not concern ourselves quite so much in the short term about valuations. Perhaps…

Some big things to look forward to this week. As was mentioned yesterday, Non-farm payrolls is published at the end of the week. As ever the state of employment and wage growth remains key in determining the direction of Federal Reserve policy. The other big thing, potentially even bigger actually, is that we’ll find out more about the ECB’s asset purchase plan on Thursday. The great and the good of Eurozone central banking will be in Naples on that day and we will be given an insight into how the ECB will further its plan to expand their balance sheet by 50%, from 2trn to 3trn. We mention numbers like those these days and I bet none of us even blink! Truly amazing. But.. and here’s the thing.. the market for asset backed securities and covered bonds is not that deep in Europe. I very much doubt the ECB can buy enough of the stuff to even get half of their balance sheet expansion done, and certainly not with the backing of the rich EU governments. Quite a quandary they’re in!

Concerns about the outcome of the ECB’s meeting, may slow the euro’s seemingly inevitable decline this week, but as to the long term, I see nothing stopping such a powerful trend. When you have rationalisations for both sides of the ledger – weaker euro, stronger dollar – it’s hard and completely illogical to try to oppose the way of things.

Today we get employment data in the Eurozone, inflation numbers out of Italy, final GDP data in the UK, and house prices in the US. Risk sentiment appears to be positive this morning. We could be at levels where equities have found short term support, I wouldn’t be shocked if we attempt to rally today. Participants will have very obvious levels that will let them know if they’re on the wrong side of the floor.

The dollar was mighty yesterday with EUR/USD sinking into the 1.26s briefly yesterday morning before recovering throughout the day, the dollar index made a 4yr high as well. This while risk sentiment nosedived and the S&P 500 took out its month to date lows – thank you very much Apple! Both EUR/USD and the S&P appear to be in range-bound mode this morning as the market pauses to assess the damage. On the data front, overnight, Japanese inflation came in softer, it’s not been as low for 10 months. Anytime inflation slips in Japan, the market is likely to question the Bank of Japan’s resolve to achieve it’s 2% CPI target, and so with core CPI slipping to 1.1% in August from 1.3% in July people notice. We probably need a few more months of data before we can really assess the likelihood of the central bank achieving its stated aim. One would think that the substantial depreciation of the Japanese yen over the last year will give import prices a boost, so the key question is consumer demand which doesn’t seem to have fully recovered from the post consumption tax hike hangover. In any case the market will start to speculate on the central bank implementing additional stimulus measures to boost inflation. That’s a narrative that could assist further yen weakness. We shall see!

Revised US Q2 GDP growth numbers will be published today with some economists expecting an upward adjustment with construction one of the sectors likely to be making a stronger than previously calculated contribution. Strong US data is not considered great news these days, as it only reduces the justification for central bank stimulus, it will certainly be interesting to see how the market takes it.

Going back to currency markets, Emerging market currencies remain uniformly weak, and in particular currencies with resource focused economies have continued to suffer, and you don’t even need to look at developing market currencies to see that resource effect… AUD/USD and NZD/USD are classic examples. Dollar strength will leave a lot of collateral damage in the weeks and months to come! I shudder to think what corporates in resource rich developing economies are thinking if they borrowed dollars in the last few years (the interest rates at which they secured their loans must have seemed like a once in a lifetime opportunity), their continuing health will be very dependent on what their central banks do to counter changing Federal Reserve policy. But the continuing weakness of their home currencies is not helping them at all, let’s hope they hedge properly!

I’m expecting continuing dollar strength today, perhaps we haven’t had a mania of buying yet which will signal a short term top, it’s hard to tell with currencies, no one publishes volume stats. But my sense is that we could see further highs in the next few sessions, but mark my words, we’re very close to a bigger pause in this bull trend. I still maintain that the most recent moves, particularly in EUR/USD have been on suspiciously weakening momentum. As I mentioned earlier.. keep an eye out today on how the markets react if the GDP revision in the US is stronger than expected, that could tell us how extended the dollar already is.

The dollar is making a mockery of my contention that trends need corrective periods in order to remain sustainable! This morning EUR/USD, AUD/USD and NZD/USD have made new lows, and the other dollar crosses have turned back strongly in the dollars favour, none more so than the New Zealand dollar which was helped by an unscheduled statement by the Central Bank Governor calling it’s level “unjustified and unsustainable”. Yesterday Prime Minister Abe in Japan made comments about the pace of yen depreciation.. it’s almost enough to make me nostalgic. Currencies are becoming sexy again, and official figures are suddenly starting to comment! Still… this should introduce some caution to USD/JPY buyers, the currency pair has had a huge move over the last 18 months, and if anything it seems to have accelerated in the last few months.. I would advise extreme caution from here.

We can see the same picture – of dollar strength – in the Emerging market currencies, with the Mexican Peso, South African Rand examples of currencies which are challenging their recent weakest levels against the US dollar. Currencies are not the only assets to feel the strength of the dollar, commodities, particularly precious metals have been victims as well, with gold and silver at their weakest for the last few months.

For the purposes of this blog, I’ll focus my attention on the euro, while there’s no question that EUR/USD has consistently demonstrated the most bearish of tendencies, I remain concerned about the quality of this latest move down. The momentum is very weak, and the longer this persists the stronger my belief that a more aggressive correction will be the eventual outcome. I’m willing to stick my neck out and let the markets continue to embarrass me! Don’t get me wrong, I have a very strong conviction that we’re only at the start of a period (possibly multi-year) of dollar strength, I wouldn’t be shocked to see EUR/USD down at 1.20 at the end of the year, but if everyone is getting short, there’ll come a time soon when the marginal buyer will tip the scales the other way, we’ve all seen it before, and the results can be very painful for those who’ve over-extended themselves. We’ll keep monitoring the situation.

The S&P 500 held above the lows as I suspected yesterday, and bounced almost 1% from where it was 24 hours ago. On the data front we have durable goods orders to look forward to in the US this afternoon, and Italian retail sales later this morning. We’ve already seen Eurozone M3 numbers earlier this morning, which showed a slight pick up of this monetary aggregate from the previous month.

I think we’re likely to see more dollar buying this morning, but I maintain that the risk is rising of a sharp and aggressive reversal. In my opinion, the quality of the buying particularly for crosses that have already had substantial moves in recent weeks (EUR and JPY spring to mind) is questionable at these levels. No doubt smart traders are keeping hold of what they have, but not adding. Don’t fight the trend is the name of the game, but always keep in mind where your optimal take profit levels are.

Risk sentiment has tailed off in recent days with the S&P 500 declining over 2% from the recent record high. At the same time the dollar’s advance has been stalled since the end of last week, this can be seen both in the currency crosses and also with gold’s recent bounce from the lows. It would be, perhaps, inaccurate to lay the blame at the door of US equities though, as the declines in European equity markets have been more aggressive, with the Eurostoxx 50 posting a 3.5% decline from the recent peak, possibly on the back of increasing pessimism about recovery prospects in the Eurozone. However it’s worth noting that after the witching (futures and options expiry on the US exchanges on the 3^rd Friday of the quarter ending months) that occurred last Friday, the performance for equities has been historically poor the week after. Sometimes we search too far, trying to attach meaning to market behaviour, it could all be as simple as a post-witching malaise.

There are any number of reasons to be concerned about where we go from here, not least valuations are already challenging historic highs, policy in some of the major central banks stands at an inflection point, US companies would rather return money to shareholders via buybacks than seek out new investment ideas, US legislators clamping down on “inversions” the latest wheez to escape higher US corporate taxes, we have geopolitical instability in the Middle East, Russia/Ukraine, pick one, pick another, pick all of those justifications. But really… where else can you park your cash right now? The same point I made in the summer. The bottom line is, you can’t earn any interest on your cash, so.. equities it is.. for now. I mean.. what else can you do right?

On the data front, we’ve had IFO in Germany which was a bit worse than expectations with a slight decline, along with consumer confidence in Italy which interestingly was a bit better than expected. There’s nothing particularly exciting coming out for the rest of the day. So we can turn our attention to the markets and wonder if the bearish tone will persist today. I’ll be keeping an eye on the September lows on the S&P 500. We were just 4 points away from it yesterday, if that should break then we could be set for deeper declines, but I still harbour some hopes that we hold from here. Still I can’t shake off the feeling that the end of the Federal Reserve’s bond buying programme, and the consequential end of balance sheet expansion could be a seminal moment for markets. We’ll have to wait and see..

As I said early last week it is entirely realistic in a trend that you have periods where markets pullback, this is a necessary requirement for trends to remain healthy. I believe we’re in a dollar up-trend, however it is entirely realistic for the trend to stall for a while as it takes a breather. We may well be seeing that right now, but I have no idea how long this paradigm might last. The currency pairs that could be especially vulnerable to corrections in my view are USD/JPY, EUR/USD, GBP/USD.. there are others but these are the big boys so it’s worth mentioning. It would not surprise me if the speculative community in positioning for dollar strength has pushed the trend further along than is justified, so if we get corrections there may be a short period of financial pain for that sector before we get off to the races again.. I’m just saying!

I am less convinced about recoveries in Emerging Market currencies generally, but a rising water level will carry all boats. They are certainly stronger as a group versus the dollar today. I continue to take a particular interest in the Indian rupee, my suspicion is that it is poised to appreciate, but it’s not yet confirming technically. I’ll let you know if my confidence level increases.

Well the Scottish people have exercised their democratic will in the referendum, and they see no reason to relinquish 307 years of a fruitful partnership. As politicians on both sides have said in the aftermath, the results will stand for at least a generation. We’re all free to debate what a ‘generation’ means, but clearly any breakup discount in sterling has been vaporised. Cable (GBP/USD) has made a high of 1.6526 and has subsequently pulled back as traders square their positions, so we can assume that the levels we see now fully discount recent dollar strength and indeed any other factors that have continued to influence the markets estimation of sterling’s worth. EUR/GBP as always represents a purer view on the pound sterling and already today we have achieved a year to date low, reflecting sterling appreciation versus the euro, and we’re within touching distance of the 2013 low. In short sterling – apart from a short period in 2013 – has not been valued as highly versus the euro since 2009, a situation which has clearly more to do with the state of the Eurozone economy than the recent referendum uncertainty.

A quick recap of data yesterday. Indian GDP and GNP numbers posted a quite stunning improvement on the previous year on year numbers, 7.7% vs 4.1% for GDP; 9% vs 3.4% GNP! Wow! I’m not sure if that’s the Modi effect already, it would be surprising if it was, but it’s fantastic news for him, as it might create a feel good factor which gives added strength to a much needed economic reform process. The performance of the Indian rupee has been unspectacular so far this year, but the technicals show we are at excellent levels to commence a new round of appreciation versus the dollar. This would be at variance with a number of other emerging market currencies which have continued to weaken against the dollar, some of the moves like that of the Brazilian real have been quite aggressive of late. It has always been our view that any hawkishness from the US Federal Reserve will pressure emerging market currencies and this has clearly been in play. And developing economies with a weaker current account balance will be especially vulnerable, as we saw yesterday with the South African rand which weakened against the dollar following the decision by SARB, the central bank, to maintain the current base rate at 9.25%. It will be worth monitoring that currency pair, USD/ZAR, particularly with gold prices posting a significant drop over the last month, and general emerging currency weakness, this is a currency pair that is primed for a sustained bullish trend (USD up, ZAR down).

There isn’t much on the data front today, we’ve already seen producer prices in Germany which were in line with expectations, there doesn’t appear to be much in the way of positive price growth in the Eurozone’s largest economy, which makes it more likely that Mr Draghi, over at the ECB, will continue to look for extraordinary measures to boost activity via monetary policy. Which is a roundabout way of saying this is likely to reinforce the negative pressure on the euro for the foreseeable future. In the short term, I actually have doubts about the direction of EUR/USD, don’t get me wrong, the trend is down, but… the momentum to the downside has been weakening in September. All trends require corrections, in order to recapture the strength of the move, and I could easily see the currency pair bouncing from here over the next few weeks, with at least 1.3050 – 1.3100 being within easy reach. To be honest, we could be in for a longer period of corrective movement as the trend has been persistent for quite some time. As I said, this is perfectly natural and to be expected.

Apart from some Canadian inflation data, and a leading indicator coming out of the U.S, there’s very little left to look forward to in terms of data releases today. I will however point out that the S&P 500 has made new highs in the last few days, I can see the index blasting upwards to new higher highs over the next few months. It is the impact this paradigm will have on US treasury yields that will exercise my thinking over the weeks and months to come. Higher treasury yields pose a significant threat to emerging market assets, and also to other asset classes like junk bonds. That really matters, and could feedback adversely into overall risk sentiment. Something to watch out for, particularly in terms of how all this reflects back on the foreign exchange markets…

The sterling recovery continues. EUR/GBP hovers near yesterday’s lows, even as GBP/USD hovers near yesterday’s highs. Volatility still remains at levels which can be considered elevated relative to recent history. With the referendum next Thursday we’re likely to continue to experience surges in either direction. While no one can predict how things will go, I can’t help but think that there will be a sufficient number of voters who before they make their imprint on the ballot box will ask.. “Why?”. I don’t get it, but then I’m not a voter in this referendum. I don’t need to get it! But if enough people ask the question, and as I suspect, fail, to come up with a good enough answer, we should see a decisive swing towards No on polling day. Just my gut feeling. The obvious implication for sterling will be an even stronger recovery. I would expect this to be more pronounced against the euro than the dollar.

Equities have been in a corrective pattern for the last week, as the bulls pause to catch their breath. We’ve seen this all before, and to my mind the only question we need ask, is where the appropriate buy zone is? Nothing has happened, no new information has been discovered to alter the current paradigm, so the trend will persist. We live in a world that is moving, at least in economic terms, back towards normalcy, and few things confirm this more than the recent decline in gold. There is less need for safety or a store of value in this recovering narrative, and gold will always pay the penalty in such an environment. Clearly we can’t ignore the impact of a stronger dollar on gold, it cannot be denied this has also been a significant factor in the recent weakening of the gold price.

Continuing with the dollar, while both the euro and sterling have been able to hold their own versus the green back in the last few days, the same cannot be said for emerging market currencies and indeed other g10 currencies. USD/JPY has made new highs every day this week, and AUD/USD has made new lows. Studying a selection of emerging market currencies, the move has been less aggressive, but generally the dollar has been strong. The sheer power of the dollars move, and the breadth of the move cannot be dismissed. This is usually indicative of a major trend. I would be amazed if in a decade from now we don’t observe the dollar at even stronger levels relative to most currencies than we see at the moment.

Some significant macro data coming out today. In the Eurozone we see employment growth and industrial production numbers, and in the US we see retail sales and University of Michigan sentiment indicators.

Yesterday the ECB cut the main policy rate from 0.15% to 0.05%, and the deposit rate further into negative territory. It also plans to begin a programme for buying private sector assets. Needless to say the euro was substantially weakened following these announcements and we saw a decisive break below the 1.30 level in EUR/USD. Indeed looking at the charts at the moment, with spot around 1.2940, there is no obvious support before the 1.2740 – 50 area. It is clear we’re in the most impulsive phase of the bear trend – the 3^rd wave to Elliott Wave practitioners, and it means this is a great time to buy euros if you HAVE to, but if you can wait, well.. you should be able to get them cheaper in the next few days.

Euro weakness has been evident in most of the crosses. However I’m uncertain about whether the EUR/GBP bear trend has resumed or not. A new low, and price action below that level for some time would be what it takes to convince – that has NOT happened yet. Clearly sterling is being dragged along for the euro’s ride, and while the recovery narrative in the UK is still in force, the weakness of wage growth might be enough to give the Bank of England pause for some period of time. If that’s the case then perhaps there is no immediate reason for sterling to appreciate substantially against the euro. Still… as far as I can see… it’s just a matter of time.

The euro cross I find more interesting however is EUR/JPY. The chart looks quite bearish to me, and this would be consistent with my suspicions that USD/JPY is due a correction in the near future. Thus if the Japanese yen has an excuse of its own to temporarily strengthen, while we’re in the midst of an impulsive weakening of the euro, it means EUR/JPY lower. Something to monitor over the next week.

It’s that time of the month again. In the US the key focus will be on the unemployment numbers as Non-farm Payrolls and the unemployment rate are announced. Economists are expecting a modest acceleration in job growth as well as a slight reduction in the unemployment rate. I would guess that as the dollar bull trend is very much still in force, any disappointment is unlikely to seriously harm the dollar, but a positive employment surprise could give it another boost and put further downward pressure on EUR/USD. At this point, particularly given the run up we’ve already seen in US equities, such a positive employment surprise might well set back major equity indices in the short term. They look due a correction of some sort in order for the bull trend to sustain, therefore I wouldn’t be at all surprised to see a move back down to about 1986 at the minimum, and possibly even 1978, but that should (in my view) represent a buying opportunity for a fresh push to new record highs.

The price action was interesting yesterday. Equities dipped in the European morning, but rallied as US markets opened. I can’t say it’s something I’ve been keeping an eye on recently but sentiment segmentation is often interesting, albeit I don’t suggest that European investors are bearish and US investors bullish at this time.  What is clear this morning is that dollar strength appears to have stalled for the moment and the equity market rally continues unabated.

The euros woes also appear to be continuing unabated too, and even though it’s been two days since a new year to date low has posted (versus the dollar), it has seriously underperformed its peers and has barely participated in the dollars pullback. This is just another sign that the conditions may finally be in place for a structural weakening of the single currency. At the peak of the Eurozone crisis there were often debates about why the euro was able to maintain its strength despite the catastrophic headwinds it faced. It seems the answer is clear now. Quite apart from central banks recycling their intervention dollars (Emerging market central banks fighting against domestic currency strength bought huge amounts of dollars when intervening, but would then need to rebalance their currency reserve portfolios back to their model weightings. This always means buying euros versus dollars as the euro, rightly, has the second largest weighting in any decent model), but also European banks were forced to sell their US assets to shore up their balance sheets. The suspicion is that those sales are in the multiples of trillions, which would be one heck of a head wind for anyone betting on euro weakness. The reason I mention this, is that perhaps most of that flow has gone now. Arguably with bund yields below 1% and US 10yr yields above 2% there’s a compelling reason for structural flows in the other direction. The time may come for a steady decline in EUR/USD on a 2 – 3 year view, surely it will take at least that long to solve the problems of France, Italy, Spain et al, assuming some new crisis doesn’t hit the US in the interim. I’m not saying that that big trade starts now, I’m just speculating that the next serious attack on the euro might not be resisted by hidden forces in quite the way it was in the past. Furthermore there are reasons for the euro to become a major funding currency just like the Japanese yen has been, but I’ll expand on that another time. Food for thought

Big data out of the US today, with inflation numbers, in particular the Core PCE numbers that the Federal Reserve pay special attention to. But perhaps they’re not as big as we think anymore? After all one of the key takeaways from Jackson Hole has been the absolute focus on employment, regardless of what happens to inflation. For now I’ll keep an eye on the dynamic between the dollar and overall risk sentiment. Have a great weekend!