• The long dollar trade seems to have become a one-way trade. Pretty much everything is weakening against the mighty old greenback. CHF, CNH, JPY, EUR, etc. Multi-year highs for the dollar everywhere. According to the Fed’s broad-trade weighted measure (which is updated every Friday), the greenback is up 6% for the year and just 5% below the all-time high from March 2020.
  • The message from the monetary policy statement this morning is that the Bank of Japan refuses to budge, sticking with its unlimited bond buying plan to defend the 0.25% 10-year yield target. Yen-weakness be damned. In the past, when the BOJ did turn, it always did in a nasty way. Denying, denying and denying and then doing exactly what you said you wouldn’t do.
  • More EU nations are ceding to the Kremlin’s demand to pay for gas in RUB. Key energy firms in Germany, Austria, Italy, Hungary and Slovakia have made the move in recent days. Clearly, Europeans don’t want to self-detonate their economies by cutting of Russian gas.
  • Global equity markets can’t catch a break. Most major markets, like the S&P 500, Nasdaq, Stoxx 50 are testing the March lows or are close to doing so. YTD losses range from 3% for the Spanish market to 13% for the Italian market. The S&P 500 is down 12% for the year while Chinese equites are the biggest losers, down almost 20% for the year despite official intervention to support the market.

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