07.09.2023 | Issue #95 | QCAM MONTHLY
«China’s long debt-landing»
The USD DXY rallied 5% since the middle of July. Given the health of the US economy versus its major counterparts, we expect further USD upside but with more bumps. The combination of lax fiscal and tight monetary policy is likely to be an undercurrent for the USD for some time. Problems in China are supporting the USD as well. We think China can avoid a hard-landing but faces a prolonged period of debt deflation.
Economy and Interest Rates
Global growth conditions continue to weaken although not rapidly. Business surveys have slipped further and the recovery in consumer confidence has stalled. The US and Japan are outperforming, while China and the Euro-area struggle the most to avoid recession…
FX Markets
The USD rose more than 5% against all other major currencies and nearly 4% versus EM currencies since the middle of July. The CHF and the CAD held up best while SEK, NZD, NOK and AUD underperformed the most. Among EM currencies…
FX Analytics
There have been few signal since changes since the last QCAM MONTHLY and the balance of all positions remained modestly long USD. We kept all discretionary Macro positions unchanged…