“Sell America” — the global downgrade of US assets in the run-up to and immediate aftermath of the reciprocal tariffs announced on April 2 — was a very painful period for markets, but a very fun narrative to write about.
This narrative appears to have been brief, to the extent it existed at all, and could likely have been more appropriately characterized as “Right-Size Hedge Ratios on America.”
That is, traders want to hold lots US stocks and bonds, but don’t want exposure to the US dollar in the process.
And that story is still running strong, as Deutsche Bank’s global head of FX research, George Saravelos, shows.
“How can US stocks be making record highs while the weak dollar is at year lows? We wrote last week that there is nothing ‘exceptional’ about the US market because global equities are also rallying,” he wrote. “But there is also an important flow story: foreign investors are now removing dollar…
