12 Jan 2015
Market correlation's and the greenback - BAML
FXStreet (Guatemala) - Analysts at Bank of america Merrill Lynch explained that the 12% increase of the USD since July places it among the five most aggressive USD ascents over any six-month period since 1980.
Key Quotes:
"The ratio between US equities versus those of the rest of the world has just exceeded the level of 2001 at the peak of the dot-com bubble".
"Inflows into US equities and the USD have been so strong that the correlation between S&P 500 and the USD has moved from negative into positive territory to reach the highest level since 2003".
"The collapse in oil prices over the past two months has provided a further boost to the US decoupling trade as lower energy prices have been viewed as good for US consumers, thus supportive for US equities and the USD".
"In this sense, the long USD, long US equities and the short energy trades have become one single trade".
"CFTC net non-commercial length in S&P 500, USD (especially against the EUR) and crude oil were all at their 52-week extreme as of Tuesday last week. These observations are also supported by our proprietary MAA analysis".
Key Quotes:
"The ratio between US equities versus those of the rest of the world has just exceeded the level of 2001 at the peak of the dot-com bubble".
"Inflows into US equities and the USD have been so strong that the correlation between S&P 500 and the USD has moved from negative into positive territory to reach the highest level since 2003".
"The collapse in oil prices over the past two months has provided a further boost to the US decoupling trade as lower energy prices have been viewed as good for US consumers, thus supportive for US equities and the USD".
"In this sense, the long USD, long US equities and the short energy trades have become one single trade".
"CFTC net non-commercial length in S&P 500, USD (especially against the EUR) and crude oil were all at their 52-week extreme as of Tuesday last week. These observations are also supported by our proprietary MAA analysis".