In terms of a Macro perspective the fundamentals in the U.S are looking more robust where the NFP data has been steadily improving and consumer confidence reaching levels not seen for a number of years due to rising house prices and the 'wealth effect'. The dollar seems like the place to be and this is expected to strengthen substantially over the next 6-12 months. We have also seen incredible moves in the USDJPY currency pair due to 'Abenomics' where the Japanese have injected large sums of liquidity into their financial system to help weaken their currency in order to drive economic growth (making exports cheaper to foreigners) which has the smell of an underlying theme of currency wars.
US Treasuries yields have also risen substantially whilst prices have decreased (the price/yield inverse relationship) due to the rotation of investors out of bonds and into the equities domain. A low interest rate environment has helped as theoretically the price of borrowing is cheap but the likelihood of an increase in interest rates has increased (US fundamentals are more robust and the headline unemployment rate has ticked down) whilst simultaneously there should be a pickup in volatility. This should be over the summer and into the Q3 period as from a historical perspective there is a high probability whist also the German elections will demonstrate uncertainty and that is one element that financial markets have a disliking of.
