Tax cut or bust? Or bust anyway?
The US tax trade may be the most obvious, transparent and crowded trade in markets. If you're a US dollar bull, you're betting on Congress delivering something, preferably soon.
What comes next?
It might be the mother of all sell-the-fact trades. Besides, what's the next catalyst for the dollar? Maybe it's economic growth but if there's a globally-synchronized growth story then much of that money will flow to emerging markets, Europe or somewhere else with better returns and/or lower valuations.
Betting on the Fed is viable but today's FOMC Minutes showed how easily Powell could pivot to a wait-and-see stance on inflation. Not too many hawks would fight it.
The hardest trades are technical breaks at the wrong time, but they're often the best ones. I don't think you can ignore what price action is screaming today.
USD/JPY
