The dollar is weaker on the data, not the dots.
DXY has drifted off the March highs while OIS-implied policy is little changed. The slide is in the activity prints, not the Fed reaction function.
ReadJOLTS sent a mixed signal. The dollar held its ISM gains.
JOLTS openings jumped to 7.6 million but hires fell to 5.1; the print is the textbook signature of a frozen labour market, vacancies up and matching down. DXY held its ISM gains at 99.11 but did not extend. Two upside prints make a sequence, not a regime. ADP and ISM Services tomorrow, NFP Friday.
DXY, daily close
04 May to 02 Jun
99.11
-0.19% wk
Source: ICE DXY, daily close. Annotation by TradingFuse.
This week's research
All notes, RSSEUR positioning has caught up to the dollar’s slide.
CFTC net longs in the euro have rebuilt from a 1-year low in March to an 18-month high. The easy carry on this side is gone.
ReadWhy the curve un-inverted without a recession.
Term-premium normalisation explains most of the bear-steepening. Growth surprise indices remain soft.
ReadA plain-English guide to OIS.
What overnight-index swaps measure, what they do not, and how to read them against fed-funds futures.
ReadA plain-English guide to currency correlations.
What the correlation between two markets measures, how to compute it in five lines of arithmetic, and the one cell of today’s dollar matrix that’s gone the wrong way.
ReadThree sessions on: the dollar story is still about the data.
DXY held the line into the long weekend. The OIS path is unchanged. The cross-asset correlation matrix is doing the talking now.
ReadA plain-English guide to COT positioning, with corn as the case.
How the CFTC Commitments of Traders report is built, the math that turns a raw net-long number into a percentile, and what May’s corn print is saying about a crowded long.
ReadA new Chair, a record-low Michigan print, and the dollar still hasn’t moved.
Warsh was sworn in as the 17th FOMC Chairman. May Michigan sentiment was revised to 44.8, a record low. DXY at 99.24 has shrugged at both.
ReadA plain-English guide to the term premium.
Decomposing a 10-year Treasury yield into the expected path of policy and the term premium, the math from the ACM model, and why the bucket has gone from deeply negative to firmly positive in this cycle.
ReadConfidence beat consensus, bonds rallied, dollar shrugged.
May Conference Board confidence printed 93.1 against a 92 consensus. The 10-year rallied 7 basis points. DXY closed flat. The data-side thesis is being expressed in rates now, not in FX.
ReadA plain-English guide to the dollar smile.
Stephen Jen’s three-regime framework for the dollar, the math behind the smile shape, and where DXY actually sits today between left-side risk-off, middle-trough underperformance, and right-side US exceptionalism.
ReadDXY finally moved. The data side took the wheel.
DXY broke 99 ahead of the Q1 GDP second estimate and the 7-year auction. Brent kept sliding, gold caught a bid, the 10-year rallied further. The data-not-dots thesis just printed.
ReadA plain-English guide to PCE vs CPI.
Why the Fed reads PCE instead of CPI, what the trimmed-mean variant adds (and why the new Chair prefers it), and how to translate a print in one measure into the other.
ReadCore PCE ticked up. The dollar didn’t.
April Core PCE printed 3.3% YoY against 3.2% prior. DXY closed lower, the 10-year held its rally. A move in the wrong direction on a hawkish print is the cleanest read on how positioning was sitting going in.
ReadEnd of week: the data thesis is in the price now.
A week ago the dollar was at 99.32 and the call was that data, not policy, would move it. Five sessions, two reference pieces and one PCE print later, DXY closed at 98.94 with the bond rally and the correlation matrix in agreement. Where the thread stands going into next week.
ReadA plain-English guide to economic surprise indices.
How the Citigroup CESI is built, why FX desks watch it more than the prints themselves, and the math behind translating an upside ISM into the index move it produces.
ReadISM came in hot. The dollar took it.
Manufacturing PMI printed 54.0 in May, the highest since 2022, with new orders surging to 56.8. DXY bounced back through 99, bonds sold off, Brent ripped. The first contrarian print in the data-not-dots thread is on the tape.
ReadA plain-English guide to the Beveridge curve.
The vacancy-unemployment relationship that sits behind every JOLTS release, the post-pandemic outward shift and what is reversing it, and the u* = √(uv) shorthand for reading the curve in one line.
ReadThe engine, MetraFuse
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