Halister News

(Bloomberg) -- DXY Index has room to rise to 102 in the next three to six months, in part because the market is overly optimistic about Europe’s economy, Ed Al-Hussainy, senior interest-rate and currency analyst at Columbia Threadneedle, says in interview.

• DXY currently at about 99.7
• Maintains long call on GBP from end of last year because “a lot of negativity has been priced in”
  • Expects sterling to recover to 1.35 in next three to six months; break of 1.30 could prompt a short squeeze
  • “There’s a massive speculative short in the pound that’s still in place, and I think that speculative short is getting squeezed.”
• UST 10Y yield seen climbing toward 2.6% on expectations of Fed rate increase in June and guidance around balance sheet
• “We still like being short bunds,” given negative backdrop, he says. “The growth picture has improved sufficiently enough that the ECB will start thinking about pulling back on QE.”