|Mon, July 19, 16|
Our descriptive model for global equities signals stress in the pre-cash US session. In the 8am hour, a tidal shift of FX was under way as the DXY advances to the 97 handle. Leading to selling pressure in EURUSD, USDJPY, AUDJPY, and GBPUSD.
Recently, a concerted effort of central banks such as ECB buying corporate debt/high yield and the BOJ talking about fiscal stimulus measures such as helicopter money has levitated US markets. Central Banks have shown their cards indicating the financial system is still highly exposed to high yield or “junk” bond market, as well as the monetary pipeline of expanding global growth is at the dead end.