Open: London Session | Forex, Metals, Oil, Agriculture September 30, 2022



The housing wealth regression indicates that every dollar of changes in housing wealth leads to a 38-cent change in consumption. The bottom line is that despite the growing problems the rising dollar is causing for the world, we won t be returning to the Plaza any time soon. But there are at least two sides to any currency trade, and no meaningful limit to the dollar is possible without willing participation by the US. The shifts in the financial tectonic plates are already causing alarm, while the Ukrainian conflict has driven a sharp devaluation for European currencies compared to the dollar.
With a two-quarter lag, year-over-year consumption has changed by nearly three cents for every dollar move in equity wealth… A weaker dollar is, on net, inflationary in the US and deflationary abroad; foreign currency appreciation supports higher external demand. A strong dollar has also driven several emerging market crises in the past. If we just think about what s going on with the dollar, it s being supported by safe haven flows, it s been supported by a very hawkish Fed.
Or, as Nick Carraway in Gatsby might have put it, the dollar is the pursued, and everyone else is pursuing, busy or tired. Beyond that, the forces driving the dollar are strong, and not going away.


The G10 collectively has US$2.8 trillion in FX reserve assets (deposits and securities, so excluding gold).


Javier Blas: Uncle Sam Wants to Be an Oil Trader.

United States

Markets are now understanding the Fed s message, political crisis for UK s new PM and chancellor, reorganization is knocking o View in browser Good morning. That s good news for many, but also means at the margin that the Fed may need to keep rates higher for longer than it wanted. The Bank of England, hobbled by a more obviously troubled economy, slipped behind the Fed in the hiking cycle. Fed Vice Chair Lael Brainard and New York Fed President John Williams speak at a conference.


EU energy ministers meet in Brussels on the power crisis. Emergency meeting of EU energy ministers 2:30 p.m. Commission Vice President Margrethe Vestager speaks at an Institute of International and European Affairs event in Dublin Like the Brussels Edition? ECB Executive Board member Isabel Schnabel takes part in a panel discussion in Spain.