European banks resume slide after the Fed.
That's what a $3Tn long in US fixed income, as the Fed hikes, gets you.
The Fed is euthanasing the entities that funded this US credit cycle just as Federal double deficit accelerates.
FT's chart showing debt held by foreigners in the US:
At a time when Sth European banks are dependent on a record amount of ECB funding via TARGET2
Immediately pushing up finding costs into year end. A 25bps parallel shift is worth probably $30-35bn in additional funding for the $3Tn in longs.
Add to that the Brexit and Italy issues and I reiterate my view that the USD is rallying into Q1 and EZ assets remain under pressure.