USD and SPX Correlation Negative Again
On a simple 'risk' view, it should be the natural state of being for the S&P 500 and USDollar to move in opposite directions - one is a high return and the other a renowned safe haven. However, the correlation between the two has been strongly positive over the past couple years as a steady Fed maintained stimulus at the same time as it contrasted more accommodative counterparts. Yet, that shared advance is starting to break. Will risk aversion rise or will rate forecasts topple?