At Any Rate Global FX: Interrogating the optimistic baseline
15 snips
Feb 20, 2026 
Patrick Locke, JPMorgan senior strategist on U.S. macro and geopolitics. Junya Tanase, JPMorgan specialist in Japanese markets and yen dynamics. James Nelligan, JPMorgan strategist on equity-FX interactions. They probe dollar downside odds, yen and JGB disconnect, sector rotation versus growth, PMI and cyclical data risks, Fed minutes implications, and geopolitics-driven market shocks.
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Commodity FX Are Cyclical, Not Just Commodity-Driven
- Commodity FX moves reflect domestic cyclical strength, not just terms-of-trade moves.
- Norges Bank FX purchases and Aussie hedging flows also support NOK and AUD rallies.
Sector Rotation Mirrors Earnings, Not Stagflation
- Recent sector rotation tracks relative earnings growth, so it is not a growth-driven US equity weakness.
- If rest-of-world growth data follow through, that keeps the pro-cyclical, dollar‑weak narrative intact.
Watch Credit Spreads For Rotation Risk
- Monitor credit spreads for signs the sectoral churn becomes systemic and forces risk-off.
- If spreads widen materially, revisit the pro-cyclical FX and rates thesis quickly.