U.S. Dollar Rally Stalls

Breathing life back into the markets from a liquidity perspective

Highlights

• You can still see investor optimism practically everywhere, even as the uptrend line comes under pressure — this definitely is not the background of a healthy market 

• The move-up in bond yields has made the relative attractiveness of equities less alluring as well, with the equity risk premium abnormally low at less than 100 basis points 

• Confusion reigns over the shape of the U.S. economy — no wonder for the first time in this Fed tightening cycle we are starting to see dissent among the FOMC officials 

• China’s lingering woes continue — not just the property market, but also a Chinese consumer that refuses to draw down its 40%+ savings rate