RBS's subprime prediction pays off
"We believed the sell-off would first and foremost be seen as a US-centric event," said David Simmonds, head of FX and emerging markets strategy at RBS in London. "We also predicted the dollar would weaken, notably against European currencies where policy rates were still rising."
While futures markets have priced out Federal Reserve cuts, Simmonds believes there is minimal risk that markets will be challenged to go a step further and price in Fed tightening.
"Meanwhile, futures markets can't
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