Dollar Asymmetry Intact
The long-awaited September payrolls report is due on Tuesday and it appears that markets have become a bit more partial to the prospect of a dollar rally after all. In the event that Congress can get its act together well before the next shutdown/debt ceiling deadlines, there is no reason to doubt whether the Fed can start to contemplate longer-term policy. This has not been reflected in Fed commentary yet, mostly because of data paucity and the Fed’s continuing ongoing communications calibration. Even if markets do start to see a critical mass of positive data and speeches, a repeat of dollar performance in Q2 is unlikely.
Read the full report: UBS