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FX Talking: Too much of a good thing
Supreme confidence in the global recovery and central banks in no hurry to tap the breaks have combined to deliver a sizable bond market sell-off. The adjustment has erred to the disorderly and prompted some adjustment in positioning – especially in FX markets. The currencies most susceptible to this correction have been the low-yielding JPY and CHF – both currencies the least positively correlated with a global recovery. While March could prove a rocky month for risk assets as US Treasury yields try to find their ‘right level’, our macro team do not buy into the permanence of the much discussed inflation ... (full story)