Open: London Session | Forex, Metals, Oil, Agriculture December 19, 2022



Now, the BofA survey shows close to unprecedented conviction that the dollar will depreciate from here: If this all sounds dreadful, it does imply a lifeline for emerging markets. So far in this century, a strengthening dollar has been awful for the emerging world, and vice versa. The last big EM rally, coupled with a weakening dollar, came as China boomed in the years after its accession to the World Trade Organization in 2001. A strengthening China helps the rest of the emerging world and tends to weaken the dollar.But now we come to one of the potential flaws in the emergent consensus.
Rates coming down should also be bad news for the dollar, which surged this year on the back of the ever-more hawkish Fed.

United States

In the US, and much of the rest of the developed world, employment remains very high, indeed bafflingly so for many. If employment has been overstated this seriously, then the bears may well be right, and further Fed tightening would be very dangerous.


The swift abandonment of Covid Zero has seen infections explode in places like Beijing.