Assume the we're heading for trouble
I believe a commodity crunch is hitting the global economy and I believe that's what markets are thinking. Central bankers believe something else.
The theme globally is optimism from central banks and eventually that theme will break. The BOC had an opportunity to hit the panic button today and brushed it aside. The ECB is likely to do the same tomorrow.
Eventually, a central banker somewhere will look at the markets, crashing commodity prices and blowouts in junk debt and realize that the narrative that we're returning to 'normal' in 2016 is dead wrong.
Who will that be?
The answer to that question is the answer about which currency to sell next.
The Fed is a good possibility because they don't have to switch to being dovish or unleashing more non-conventional monetary policy, they will just need to be less hawkish.
Plus, they're extra-sensitive to stock markets. The problem is that climbing down will leave a stain on their credibility but they would be able to do it slowly, starting with a bit of extra caution at the FOMC in seven days.
