⚓ J.P. Morgan: Chart of the Month — In the Middle of the Dollar Smile
J.P. Morgan's July Chart of the Month examines how the roughly 40% pullback in oil prices from their Iran-conflict peak is reshaping the US dollar outlook, pushing markets toward the middle of the 'dollar smile' framework where improving global growth typically weakens the dollar. The note highlights that narrowing US equity outperformance versus the MSCI World ex-US Index (given its lower 10.5% vs 38.3% tech weighting) could accelerate capital flows out of the US as global PMIs improve. This is a relevant signal for currency-hedged and international allocation decisions.
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