Market news
26.10.2021, 12:12

More USD strength into year-end, another leg lower in early 2022 – TDS

The market remains on the tensions between stagflation and reflation, shifting a bit to the latter recently. Although the USD could remain on the back foot for the next few weeks, economists at TD Securities expect the greenback to end the year on a solid foot.

MSCI World is within striking distance of recent peak, S&P 500 marks fresh highs

“Global equities, proxied through the MSCI World, are within striking distance of the recent highs. US equities have already posted new highs, likely informed by a solid start to earnings season. A relatively upbeat Q3 earnings season would probably support the reflation environment, even if central bank rhetoric leaned on the hawkish side.”

“We're biased towards more USD strength into year-end for the low yielders, like CHF, JPY, and EUR, though things have moved pretty far in JPY.” 

“Given the back-and-forth, flip-flopping state of markets now, we see a step back for the USD followed by a step forward in the final two months of the year. In other words, the USD should consolidate into year-end before starting another push lower in early 2022.”

See: The case for a stronger USD is compelling against the low yielding EUR, CHF and JPY – MUFG

 

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