After an exceptional week last week, US stocks gave back some of their gains alongside outflows from the US dollar. The bent of global investment markets remained deflationary monthly:

However, the most important signals are the long-term signals, which imply the market odds of a globally rising growth regime. Nonetheless, markets today saw capital leaving the US, as evidenced by our Currency Bloc Monitor, which aggregates currency movements across 42 global currencies into currency regions or “blocs” to help us understand the trend in global capital flows:

We can see this in a more traditional sense as well. All major currencies and commodities were up against the dollar:

These moves largely came amid a slower than expected print in durable goods orders in the US, after weaker than expected new home sales yesterday:

Therefore, while US economic momentum is positive, it seems to be decelerating. With all eyes on the Fed this week + GDP data also coming in, we remain cautious on aggressively adding. Despite these potential negative catalysts, US stocks look attractive, according to our Trading Tools report. What was yesterday in implied volatility discount in US stocks has now switched to an implied volatility premium, suggesting market hedging ahead of a potentially hawkish Fed. Our bias remains to be bullish growth assets and US stocks, but we would add very carefully here and not reach max exposure:

As a refresher:

  • Trading Range: These ranges represent a trading bank within which a currency should trade based on multiple market factors. If we are long- prices above the upside range indicate the asset is expensive, and prices below the downside range suggest that they are cheap and vice versa if we are short.
  • Year-to-Date Returns: This is the price performance of a given currency over the course of the current calendar year, in percentage terms. We also compare the current price to the 52-week high and low for reference.
  • Price Momentum: This looks at cumulative rolling returns for a selected lookback period.  Positive momentum is good if we are long and bad if we are short. 
  • Implied Volatility Discount/Premium: This tells us what the market expects in volatility relative to the history of volatility. If we are long a currency, we typically want market implied volatility to be higher than historical volatility and vice versa if we are short.

As a reminder- it is not just enough to have the technical tools we provide here. You need to know the fundamental developments in markets that are driving these moves! Head to to get access to our research and analysis.