The dollar is regaining its crown as one of the world’s most appealing assets, defying the “Sell America” narrative that took hold earlier this year https://t.co/ke6ZFFVv2v ...

Market Momentum Shift - Investors are moving away from AI investments due to valuation concerns, with healthcare emerging as the best-performing sector, typically viewed as defensive [1] - The cyclical recovery, supported by monetary and fiscal stimulus, is leading to earnings growth in cyclical sectors, making them more attractive compared to AI and cloud sectors [2] Currency and Asset Performance - The US dollar has increased over 3% since its low on September 17, while Bitcoin and gold have seen declines after peaking on October 6 and October 20 respectively [3] - The strength of the dollar is considered temporary, with ongoing pressures expected to weaken it in the future [4][5] Economic Outlook - Despite recent dollar strength, it remains down approximately 9% year-to-date, with structural factors suggesting continued pressure on the dollar [7] - The cyclical recovery is anticipated to continue, with expectations of further interest rate reductions, which could support earnings growth in sectors outside of technology [10][11] Investment Strategy - A selective approach to buying the dip is recommended, focusing on sectors such as financials, healthcare, and energy that are expected to benefit from the cyclical recovery and a weakening dollar [9][12]

Core Viewpoint - The dollar is nearing a two-month high due to fiscal and economic concerns affecting currencies in Asia and Europe, with hedge funds increasing bearish bets on the euro and yen while showing demand for long-dollar exposure [1][2][3] Currency Performance - The Bloomberg Dollar Spot Index rose by as much as 0.3%, approaching its highest level since early August, driven by increased bearish options on the euro and yen [1][4] - The dollar has strengthened nearly 1% since the end of September, reducing its year-to-date decline to approximately 7.6% [5] Global Economic Concerns - The euro is under pressure due to political turmoil in France, while the yen has weakened amid speculation of increased fiscal expansion and slower interest-rate hikes in Japan [2][3] - Concerns regarding fiscal sustainability in Japan and France have led to a reassessment of the US macro outlook, with traders viewing the US as a relatively stable option despite the government shutdown [3] Market Sentiment - There is a notable shift in market sentiment towards the US dollar, with one-year risk reversals indicating the highest level of optimism since April, marking a significant turnaround from previous bearish positioning [4] - Despite the recent dollar strength, skepticism remains among market participants regarding the sustainability of this bounce, contributing to increased demand for gold, which recently surpassed $4,000 an ounce [5][6]

Group 1 - The U.S. dollar gained against major currencies, including the yen, Swiss franc, and euro, following a cautious statement from Federal Reserve Chair Jerome Powell regarding future easing measures [1][3] - The euro declined after an unexpected fall in German business morale, with a decrease of 0.69% to $1.1734, while sterling fell 0.58% to $1.3443 [2] - The U.S. dollar index increased by 0.65% to 97.87, attempting to recover from two consecutive losing sessions [5] Group 2 - Markets anticipate quarter-point rate cuts at the remaining two Federal Reserve meetings this year and another in the first quarter of 2026, aligning with the central bank's guidance [4] - The focus is on upcoming U.S. data, particularly the personal consumption expenditures price index, which is crucial for shaping expectations on the Fed's policy direction [4] - The dollar remains underweight in the real money community, suggesting a potential period of consolidation [3][5]

Group 1: Ukraine's Impact on Oil Prices - Ukraine has intensified attacks on Russian refineries, halting approximately 300,000 bpd of refining capacity, which is expected to support crude prices by tightening global oil supplies [1] - Ukrainian drone attacks have led to a reduction in Russia's crude-processing runs to 4.98 million bpd in early September, marking the lowest monthly average in over 3.25 years [1] Group 2: US Economic Indicators - Better-than-expected US economic data, including a decrease in weekly initial unemployment claims by 33,000 to 231,000, indicates a stronger labor market, which is supportive of energy demand and crude prices [2] - The Philadelphia Fed business outlook survey increased by 23.5 to an 8-month high of 23.2, surpassing expectations, further bolstering confidence in energy demand [2] Group 3: Global Oil Supply Concerns - The International Energy Agency (IEA) has raised its 2026 global crude surplus estimate to 3.33 million bpd, which is 360,000 bpd higher than previously anticipated, raising concerns about a potential global oil glut [3] - OPEC+ has agreed to increase crude production by 137,000 bpd starting in October, which is less than the previous increases, indicating a cautious approach to restoring production levels [7] Group 4: US Oil Inventory and Production - As of September 12, US crude oil inventories were 4.7% below the seasonal 5-year average, with gasoline and distillate inventories also below their respective averages, suggesting tighter supply conditions [8] - US crude oil production slightly decreased by 0.1% week-over-week to 13.482 million bpd, remaining below the record high of 13.631 million bpd [8] Group 5: Active Oil Rigs - The number of active US oil rigs increased by 2 to 416 rigs, slightly above the 4-year low, indicating a modest recovery in drilling activity [9]

Group 1: Crude Oil and Gasoline Prices - October WTI crude oil is down -0.34 (-0.53%) and October RBOB gasoline is down -0.0092 (-0.45%) due to a stronger dollar and weaker-than-expected US housing starts and building permits [1] - Weekly EIA crude inventories and gasoline supplies fell more than expected, limiting losses in crude prices [1] Group 2: US Housing Market Impact - August US housing starts fell -8.5% month-over-month to 1.307 million, below expectations of 1.365 million [2] - August building permits unexpectedly fell -3.7% month-over-month to a 5.25-year low of 1.312 million, weaker than the anticipated increase to 1.370 million [2] Group 3: Ukraine-Russia Conflict and Oil Supply - Ukraine has intensified attacks on Russian refineries and oil infrastructure, which is bullish for crude prices by curbing Russian crude exports and tightening global oil supplies [3] - Damage from Ukrainian drone attacks has led to a reduction in Russia's crude-processing runs to 4.98 million barrels per day (bpd) in early September, the lowest monthly average in over 3.25 years [3] Group 4: Sanctions and Global Oil Supply Concerns - Ongoing war in Ukraine raises concerns about potential additional sanctions on Russian energy exports, which could further reduce global oil supplies [4] - The US proposed that G7 allies impose tariffs as high as 100% on China and India for their purchases of Russian oil to pressure Russia to end the war [4]

Currency Market Analysis - The dollar's value decreased by 10% in the first half of the year [1] - The dollar's dominance in the global monetary system is being questioned [1] - The dollar's strength lies in the absence of a clear alternative currency [1]

Core Viewpoint - The content emphasizes the importance of conducting personal due diligence and consulting competent advisors before making any financial decisions, particularly in relation to investments and financial instruments [1]. Group 1 - The website provides general news, personal analysis, and third-party content intended for educational and research purposes [1]. - It explicitly states that the information should not be interpreted as recommendations or advice for any financial actions [1]. - The website does not guarantee the accuracy or timeliness of the information provided, which may not reflect real-time market conditions [1]. Group 2 - The content includes information about complex financial instruments such as cryptocurrencies and contracts for difference (CFDs), which carry a high risk of financial loss [1]. - Users are encouraged to perform their own research and understand the risks involved before investing in any financial instruments [1].