Regarding liquidity, the fed also increases the Bal sheet reduction 9/1. I saw a commodity chartist on Bloomberg leaning that the dollar would soon turn into a double top and would retrace back to perhaps 100 or below. Is the correlation as simple as rising dollar negative for stocks and commodities? Falling dollar positive? Thanks.
Gary August 30, 2022
Too many variables in the mix at any given time to call it black and white. For example, if it were a Goldilocks situation (e.g. 2013-2019) non-inflation/reflation/export stuff in the US would be perfectly capable of rising with the strong dollar.
But at the end of an inflationary phase if both USD and GSR go up it’s not a good sign at all.
Regarding liquidity, the fed also increases the Bal sheet reduction 9/1. I saw a commodity chartist on Bloomberg leaning that the dollar would soon turn into a double top and would retrace back to perhaps 100 or below. Is the correlation as simple as rising dollar negative for stocks and commodities? Falling dollar positive? Thanks.
Too many variables in the mix at any given time to call it black and white. For example, if it were a Goldilocks situation (e.g. 2013-2019) non-inflation/reflation/export stuff in the US would be perfectly capable of rising with the strong dollar.
But at the end of an inflationary phase if both USD and GSR go up it’s not a good sign at all.