The USD is trading weak versus especially low-yielding peers, which is consistent with a bull-steepening of the yield curve. The question is if the SNB and the BoJ will have to change plans due to stronger FX developments.
![Something for your Espresso: Bye bye USD?](https://stenoresearch.com/wp-content/uploads/2023/01/Something-for-your-espresso-1080x675.png)
The USD is trading weak versus especially low-yielding peers, which is consistent with a bull-steepening of the yield curve. The question is if the SNB and the BoJ will have to change plans due to stronger FX developments.
We see cyclicality as overcooked in equity space, but find ways to exploit the stretched positioning.
The Russian curbs on diesel exports arrive at a bad timing with already low inventories ahead of peak demand season. Central banks trying to pause amidst this will feel the wrath from long bond yields.
The Bank of Japan has fueled a global curve steepening and the US Treasury is forced to emphasize the trend with substantial ramifications for liquidity, rates, FX and equities. Here is how we play it!