from Zero Hedge
Markets have stopped focusing on what central banks are doing and are “positioning for what they believe central banks may or may not do,” according to BofA’s Athanasios Vamvakidis as he tells FX traders to “prepare to fight the central banks,” as the market reaction to central bank policies this year reflects transition to a new regime, in which investors start speculating which central bank will have to give up easing policies first.
The market has started testing the central banks
In recent years, FX investors had to focus primarily on getting three key market drivers right: global risk sentiment, commodity prices, and which central bank will ease more and deeper into unconventional policy territory. Interaction between these three made life difficult for FX investors.