Open: London Session | Forex, Metals, Oil, Agriculture September 23, 2022

As a result, gilt yields surged, and yet the pound managed to drop to yet another 37-year low against the dollar. A stronger dollar (and this is the strongest in 20 years) generally means a tougher environment for US credit. A stronger dollar is straightforwardly bad for dollar-denominated EM credit as it makes it directly more expensive to repay. A stronger dollar tends to mean higher EM credit spreads. An ever-stronger US dollar leaves policy makers from Tokyo to Santiago in near-constant firefighting mode to mitigate its damage to their economies.
A typical retracement after a sustained rally, as dollar-yen has seen since March, would take the cross into the 134-to-138 zone.

Hurry Up European Union member states are racing to clinch a political agreement within weeks that would impose a price cap on Russian oil. The EU races to secure an oil deal, countries are in defense mode against the greenback, Russia remains defiant at the UN and View in browser Good morning. A cap would align the EU with a US effort to keep the cost of crude from soaring and to hit Moscow s revenue.

Both the fed funds rate and the 10-year yield are still far below the level of inflation, so on this basis real rates are still negative. The Ice Age Is Over (Really) The downward trend in 10-year Treasury yields that has persisted ever since the Fed under Paul Volcker slew inflation is over. A rule of thumb is that the fed funds must rise to exceed the inflation rate. Their currencies have been under pressure for a while, and their central banks in many cases started hiking many months before the Fed started its own campaign.
If Jerome Powell and the Fed succeed as they hope, and replicate Volcker, then maybe they can start another downward wave. Earnings, Please Fall The US stock market is still above its lows from June.

At a closed-door ruling party meeting late Wednesday, Orban also for the first time explicitly called for the withdrawal of EU sanctions, newspaper Magyar Nemzet reported. That s in addition to measures the bloc could take to reduce fuel prices, according to EU diplomats. Italy front-runner takes jab at EU over Hungary.