Flatter curve, weaker USD. We project the USD to fall another 3-4% from current levels, with the US economy slowing into Q4 working as the catalyst. The rates market is pricing around a 50% probability of the Fed hiking by year end, but with growth expected to dip in Q4, headwinds for the Fed to act are likely to become stronger. We believe weaker US data should not only reprice US front end rates but also flatten the US curve further from here, taking the USD lower. Liquidity hunting yield. Liquidity conditions remain ample, with Japan’s latest flow of funds report suggesting its corporate sector cash ... (full story)