Bloomberg Surveillance · Monday, July 20, 2026
A key global macro call is the unwinding of the crowded trade of shorting US rates versus going long European rates, with the spread between German and US rates expected to tighten. The dollar's strength is seen as somewhat stock-specific, dependent on AI trades and US exceptionalism. If those themes falter, a higher euro and softer dollar is more likely.
“I think the one top call is that the crowded trade off earlier summer shortening US rates versus going long EURO rates, that's going to continue to be unwound and there'll be a pain trade there. And when wash first walked in talking tough, keeping long end in control through that, people really believe that that would send US rates higher and higher, and that Europe would go through sum adult drums Well not exactly playing out on US data on Europe. Germany finally going through delivering key reforms. So I think that spread between German European space and US will continue to titan.”
“That's a bit stock poll so on its own If it's a bit, depends on yet again, the Ai trades. If US exceptions then comes back, then all these calls of one ten, one eleven dollars maybe back. If we go through these choppy times more rotation, then my official cerebellus call of one twenty has more chance. One thing a higher euro software dollar really needs is Asia currencies beyond China to join Japan, Korea, Taiwan. Those are way too cheap and one godle that may finally come if Japan repatriation the headlines of last Friday and then Takaichi emphasizing it again, if Japanese money finally flows into their own assets.”