Matthew think of the dollar as a manifestation of the current growth/value debate in equities. Currently, "growth", which ironically only grows when nothing else is growing and when it get all the cheap money it needs is at historic extremes to "value". That's how I see the $ vs all other value currencies. From here the ratio corrects in two ways. First, the nice way via reflation, which is what we got in 2016. In this scenario, central banks easing works and global GDP starts to accelerate. If that occurs, assets leave the $ and flow to buy value EM FX, Commodity currencies i.e. AUD, CAD, NZD etc. The second scenario is the not so nice i.e. via a US recession. In that scenario, Fed current easing is insufficient, overwhelmed by a poor/no trade deal or more likely than not too late. We walking into Jan or Fed and are faced with a horrible NFP. In that scenario the Fed slashes rates collapsing rate differentials vs other currencies and you don't want to own "growth" with its super high or no P/Es. Growth/value corrects but via a collapse in growth. Either way the ratio corrects.

Hi Alberto, in terms of the Gold you have and EDs you have to be careful, because not all curve steepeners are created equal. You can get a reflationary bear steepener (long end sells off more than front end) not good for gold at all and probably not great for EDs). This is why we advocated cutting some risk in precious metals. Alternatively a recessionary bull steepener (front end rallies more than backend as Fed is forced cut rates very aggressively as growth slows). That great for gold and EDs. The issue is which one we are about to see. My bet 60/40 or maybe 70/30 is that its a reflationary bear steepener but it isn't clear. Hence my reservation about making big 2020 trade calls, until we have greater clarity. PS. The resolution of reflation/recession will set the tone for all directional trading.

Hi Roger, I actually became less bearish in the "Less Doom & Gloom" piece that we published on 14th September. At the time our concerns were that markets had became overly extended in terms of betting on the bearish/race to zero trade (especially fixed income) and that the data was on the cusp of improving. That's how its unfolded and I still believe we have further to run. That said it remains a tactical view, because it still isn't clear that despite the price action in markets we are doing anymore than seeing positions squeezed and that real economic reflation is guaranteed. See the comment below.