with this swap, it looks like usdeur and usdgbp both weakened. Currency pairs - one side gets weak, other strong - USD will probably get strong. Not good for risk assets.
I will also suggest that dxy is funny instrument - member states can cut interest rates and dxy goes up, and member states can raise interest rates and dxy goes down - totally not intuitive.
CB's can play all kinds of games with currencies.
Many times its just a crap shoot
Well, looks like faceripper time - fed is cutting interest rates on the 30y
either that or they are loading guns for a different swap
This mornings swap was to synch all DXY member states to CA30 bonds (canadian) (1) now all currencies move as canadian currency.
Canada is #1 exporter of oil to USA
Usually oil++ means canadian dollar++ - so now everyone moves like canadian dollar
DXY = USDCAD now.
So now the game will be for japan to buy more canadian bonds, weakening usdcad even more.
As USDCAD weakens, cause dxy states linked, DXY would weaken, stonks would moon.
Lets see...
Zooomed in so its easier to see #2 is ca30y bond yield
oil producers may own physical, but no one is as masterful at currency games than dxy states.
no.
one.
Im sure a 200bp move in oil (down) is completely normal....
with dxy currencies now synched to cad, fed has to LOWER rates else oil will crash.
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I study the vix, geopolitics and currencies - trying to make sense of what is actually happening in the context of sound bites we get here or there from government.
Its hard to paint an actual picture from a single sound bite or news article.
But when you put them all together you paint a tapestry - some call it a masterpiece - others call it a dystopian hellscape.
For each point I will try to include a relevant news topic.
Lets begin.
The U.S. is not just struggling; it's in a death spiral.
Driven by hyperinflation & desperation, the government is making choices that solidify its descent into kleptocracy and civil breakdown.
Here’s the terrifying truth that is unfolding
Crypto: Not Innovation, But Capitulation.
The government, facing a worthless dollar, is now frantically trying to contain crypto by regulating it into the banking system.
This isn't forward-thinking; it's a desperate attempt to co-opt the flight from fiat before total loss of control.
Its an admission the dollar is no longer a store of value which is pretty damning for a government to turn against its own currency like this.