Introduction by our CEO, Jens Nordvig
“All told, 2025 has seen an important USD asset allocation shift, and serious question marks around the USD bull trend that has been in place for most of the past 10-11 years have appeared. But precise and holistic flow analysis also indicates that the allocation shift may have peaked and that the force from this factor will be less dominant in H2 compared to H1 2025.”
As such, we are again in a somewhat different regime for the USD. The focus has shifted to Fed dynamics, including the pressure on Fed independence and the signals from the US labor market.
Our last client call (hosted in early July with participation from Wharton’s Conti-Brown) was indeed aimed to prep for this phase, with a focus on how the Trump administration will and can influence the Fed. And the regime shift is now starting to show up clearly in market dynamics, with the USD trend much more closely linked to US rates moves, as illustrated in the simple chart below.
This in turn also means that the interplay between inflation and tariffs will be crucial, and on this front Chris Marsh has been digging deep, and we think the market may be underestimating the role inflation effects from tariffs will play into the final FOMC meetings of the year. Markets are always non-linear, and the drivers are always dynamic. This is now playing out, once again, in relation to the USD, and global markets more generally.
The chart shows 300 period (12.5 day) and 600 period (25 day) rolling correlations in changes for SFRZ6 and EURUSD, using hourly data.
Substack Highlight: Are Foreigners Selling US Assets (Part II) – Aug 12
In this follow-up analysis, Jens Nordvig examines the ongoing shift in global asset allocation away from the U.S. dollar, a trend that intensified earlier in 2025 but now shows signs of moderation.
Drawing on proprietary flow data, the piece highlights that while April saw sharp foreign selling of U.S. fixed income and heightened USD hedging activity, more recent months suggest stabilization in both bond and equity flows. Importantly, this shift does not signal an imminent dollar rebound — rather, traditional fundamentals like the U.S. economic cycle and Fed policy are poised to regain influence over currency dynamics in H2.
Jens Nordvig on Bloomberg Surveillance – Aug 13 |
Exante Data Founder & CEO Jens Nordvig joined Bloomberg Surveillance for an extended conversation on global currency markets, exploring where the biggest FX opportunities may lie and analyzing President Trump’s strategy to weaken the U.S. dollar.
In this in-depth discussion, Jens shared his perspectives on:
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The potential market impact of a weaker dollar policy
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Key FX trades to watch in the current macro environment
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How political developments could influence global capital flows
Substack Highlight: US Inflation and Tariffs On The Move – Aug 3 |
Our Chief Economic Advisor, Chris Marsh, digs into the evolving impact of tariffs on core goods inflation in his latest Substack post. With a detailed breakdown of which products are already reacting — and which haven’t yet — this piece offers a sharp lens on the forces shaping the inflation path ahead.
From household appliances to cars and clothes, Chris highlights why the tariff passthrough is far from uniform — and what that could mean for policymakers and markets alike.
The AI Revolution: Jens Nordvig on The Washington Post – Aug 4 |
Our Founder & CEO, Jens Nordvig, shared his latest estimates on how AI investment is transforming the U.S. economy — projecting a 0.7% boost to GDP growth by 2025, nearly half of the Fed’s entire forecast for the year.
As capital flows into data centers, chips, and infrastructure, the macro impact of AI is becoming too large to ignore.
Continuing the conversation, Jens’s latest Substack dives into AI adoption in finance, spotlighting its growing role in enhancing macro analysis and investment decision-making.
He discusses how, after initial hesitation, 2025 is proving to be a breakthrough year as financial institutions increasingly integrate AI tools—not just to generate alpha but to save time, automate routine tasks, and uncover deeper insights.
If you are interested in a recording of our call on Fed independence and the selection of the next Fed Chair, please reach out to kaye.gentle@exantedata.com. More generally, if you have any questions about how Exante Data can be helpful in your investment process, just let us know.