“Europe’s incredible shrinking bargain: What was agreed will not help; what helps was not agreed.”
Is the worm turning?
US Dollar Index Daily:
Are the themes and dreams starting to change? Can we hear the grinding wheels in the engine room of conversion flow?
Emerging Thematic a simple set:
- US growth faster than Europe, i.e. dollar yield support may improve
- Finally an end in sight to QE2 and no QE3
- European political risk hiking up; and no real structural change to sovereign debt problem despite considerable Band-Aids and PR
- Politics and signs of global deceleration raw material for a rethink on Bank of England interest hike discounted into the pound
- Negative dollar sentiment extreme reached?
A big maybe! Price action of late at least supporting the background bad news emerging from Europe; that seems to be a change and is often the qualitative conversion flow indicator that leads the new powerful thematic—should there be one.