DXY Continues Its Stranglehold

It should come as no surprise that the Dollar Index (DXY) appears in our Market Insights report once again; dollar strength has been one of the most important macro factors driving asset prices over the last 6 months, alongside inflation and geopolitical uncertainties (to name a few).

Aside from the last 7 days (during which the DXY has decided to take a breather), it has been truly “UpOnly” for the greenback. DXY was 95 when the 2022 calendar year began. It has since risen to roughly 103, notching an 8.5% gain YTD. This move has also been the fastest YoY change in many years, leading to the DXY breaking out of its 7 year range.

This DXY strength has been a consistent drag to risk asset performances over this same time period, as discussed in our previous market notes.

“The last week has seen the S&P500 index lose key psychological and structural support around 4000. If the macro backdrop continues to worsen, the pre-COVID market highs become increasingly more likely.” From last week’s Market Insights, Crypto Hell Week.

The following week has not been any kinder to the equity markets, either. After a slight reprieve, the S&P500 is attempting to make new lows on the year. At the time of writing, the index has officially moved into bear market territory, defined as a 20% drawdown from prior all time hig