Risk aversion in markets continues to play out, with our technical team now targeting an S&P 500 level near 1600, a 25% peak to trough decline. From an FX perspective, the key developments are as follows: 1. A growing fear that monetary policy is now "pushing on a string," at least from an FX perspective. EUR and JPY are materially stronger now than levels before ECB chief Draghi hinted at more easing and the BoJ introduction of negative rates in January. 2. An obvious end to the monetary policy divergence trade when looking at rate differentials, as we discussed in depth last week. Last week our advice was to avoid ... (full story)