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How Much Further Can The Dollar Run?
In "Hard Landings, Bond Vigilantes And Angry Villagers," I mentioned the somewhat daunting conjuncture of a stronger dollar, higher oil and higher Treasury yields.
Eventually, dollar strength could brake crude's ascent, but the dynamic looked a bit self-fulfilling recently: Higher crude pointed to upside inflation risk, which in turn increased hawkish risks around the Fed, biasing the dollar stronger and so on. Breakevens are up ~10bps from late last month.
At the same time, the dollar appeare
