A Dose of Reality

The dollar index, which has spent the past two months at lofty heights based on expectations of an eventual rate hike, broke through key support overnight on a dose of reality from, of all places, Fed President Williams.

2016-08-16 DX 60 0600

This enabled USDJPY to finally tag our 99.96 target, which has resulted in a rare sell off in the futures.

Naturally, another Fed President (Dudley, this time) immediately grabbed a microphone to exclaim that a September rate hike is very much a possibility, and that “the market is underpricing rate hikes.”

Wouldn’t it just be easier if they’d announce where they’d like SPX to close this afternoon?

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