Why the US dollar will be the 'gamechanger' of 2018

Financial markets are heavily distorted by the unprecedented market presence of central banks. Markets have become extremely sensitive to changes in central bank actions.

The European Central Bank (ECB) is walking a fine line as it tries to exit quantitative easing in Q4 and tweak its rate guidance for 2019. 'Dark clouds' ahead for European sovereign bonds Meanwhile, US dollar weakness rooted in net external liabilities worth 40% of US GDP - double the level that prevailed on the onset of the financial crisis ten years ago - has the potential to spoil the party. Even if the ECB scaled down asset purchases to €30bn a month starting in January, monetary stimulus looks increasingly at odds with robust growth in the euro area. Public deficits will be le...