SocGen: "The Upcoming Central Bank Reversal Can't Be Helpful For Stocks"

Today's post-European open ramp in the USDJPY may have boosted risk sentiment after yesterday's sharp sell-off, and lifted global equities off session lows, but for many this is "too little, too late", with Bloomberg's commentator Marc Breslow noting earlier that at this point "it's a matter of when not if markets break down", a sentiment which was shared overnight by SocGen's FX strategist Kit Juckes, who in a note writes that "The wider Fed debate is about the impact on risk assets of shrinking the balance sheet. If near-zero rates and central bank buying of bonds have been the fundamental driver of global capital towards higher-yielding assets, then reversing both parts of this can't be helpful. Which is how markets have reacted overnight. "

Below are key excerpts from his overnight note:

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