US Yields Likely Have Higher to Climb: 3-Minutes MLIV

Group 1: Japan's Economic Context - The yen has strengthened since the election, currently trading at 153, indicating a shift in market sentiment [1] - There is a narrative suggesting a turning point for Japan's economy, with a pro-growth outlook and certainty in policy implementation, leading to a belief that the yen is undervalued [2] - Despite the positive sentiment, fundamental bearish reasons for the yen remain, including slow economic growth and a large debt burden with negative real yields [4] Group 2: Dollar Dynamics - The dollar's reaction to strong payroll numbers was less pronounced than expected, indicating a complex relationship between economic data and currency movements [6] - The market is structurally overexposed to the dollar, which is expected to trend downwards over the coming years, with opportunities to offload during spikes [7] - Weak economic data could justify rate cuts, further weakening the dollar, while strong data may not provide relief due to poor monetary policy [8] Group 3: Market Sentiment and Equity Outlook - There is a sense of anxiety in the market, particularly regarding potential shocks in equity due to ongoing portfolio damage and wealth concerns [10] - The impact of AI on job recovery is viewed as slower than some predictions, suggesting a longer timeline for significant changes in the job market [11]