The US dollar has broken higher. What message is this leading indicator of global markets sending? There are three likely explanations for the dollar’s breakout, each with the potential to frame the market narrative in the coming months. First, Jerome Powell’s renomination, against the backdrop of rising inflation expectations, sends a modestly hawkish message to markets. Second, the revival of the pandemic has undermined the EUR. The focus now turns to incoming German Chancellor Olaf Scholz and his revitalisation plan. Finally, a rebound in oil prices, despite a globally coordinated sale of strategic reserves by major buyers, could lift inflation expectations and put greater pressure on the Fed to react.Speakers:- Manish Jaradi, Senior Investment Strategist, Standard Chartered Bank- Audrey Goh, Senior Cross-Asset Strategist, Standard Chartered BankFor more of our latest market insights, visit Market views on-the-go.

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