Soc Gen’s Kit Jukes sees a higher USD:
A strongish durable goods orders release, and a perception that easier fiscal policy is coming all over the world are cited as the catalysts for yesterday’s lurch higher in Treasury yields, but the underlying cause is that after 10year yields halved between the end of 2013 and mid-2016, there were a lot of longs which are still being flushed out. Positioning isn’t going to stand in the way of bond prices falling which in turn is the fuel for the dollar’s advance.DXY is testing 102, a level last seen in March 2003, and we expect a further 6% rise over the next few months. In broader trade-weighted term, the dollar is now within 2% of the 2002 peak which seems sure to break in the coming days, taking the dollar back to levels not seen since 1986.
HSBC sees it too:
