Barclays Research likes long USD across the board into year-end.
"Risk-positive developments in recent weeks include China’s Caixin services PMI was much stronger than expected o US 5y5y CPI swaps are off 40bp from peak, and commodity prices have fallen though, admittedly, this is largely due to higher recession fears o But the jobs report should lower recession concerns in the US
These positives are more than offset by the looming energy crisis in Europe, in our view. The odds of a stronger recession in Europe have risen considerably given risks around NS1 o And if US LNG exports to Europe are impacted, Europe will face even bigger headaches Moreover, risk assets have rallied; for example, ARKK is up 33% from mid-June lows," Barclays notes.
"What to do o Stay long the USD; the rest of the world looks in far worse shape," Barclays adds.