The end of American exceptionalism: the correlation between the dollar and risk assets breaks

Morgan Stanley Market Consensus Extreme market movements break the correlation regime, the end of American exceptionalism. Matt Garman (MS Alpha) recognizes that the correlation between the dollar (USD) and risk assets has never been very stable but historically has tended to be positive both in an extreme risk-on environment and extreme risk-off (i.e. “USD smile”). In fact, every correction of the equity USA (or bear market) has gone with a st…