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Illustration: Lazaro Gamio/Axios
Fed Chair Powell has done his part to deflate the very strong U.S. dollar. Powell announced in December that he could feel the market and at last month's policy meeting announced his plans for the central bank to stop with the 50 B's by year-end.
Still, the dollar has continued to rise.
What's happening: Analysts and fund managers had largely expected the dollar to weaken this year as other central banks initiated quantitative tightening and stimulus from the 2017 U.S. tax cuts and spending increases lost their impact.
What they're saying: But other central banks have followed Powell's lead in reversing the QT trend, and political dysfunction and economic malaise are keeping the greenback bid, John Doyle, vice president of dealing and trading at Tempus Inc., tells Axios.
Despite having complained as recently as March 2 that the dollar is too strong, President Trump may also be to blame for the continued strength, says Douglas Borthwick, managing partner at Makro Intelligence.
Treasury Secretary Steven Mnuchin said on Saturday that the U.S. will insist measures to prevent currency devaluations be included in future trade deals.
There's also a general flight to safety that pushes traders to buy dollars in times of economic stress. But it may be playing out in new and unexpected ways.
The intrigue: The New York Times' Binyamin Applebaum writes that foreign demand for $100 bills has surged even as the domestic use of dollars has declined.
"The number of $100 bills in circulation roughly doubled between 2008 and 2017, and experts estimate a vast majority are in foreign hands."
Between the lines, per NYT: One possible reason is that the $100 bill "is the preferred currency for illegal transactions: gambling, drug deals, sales of weapons."
Emerging markets continue to be a favored trade for investors, but may run into a strong headwind if the the dollar continues to strengthen.
EM debt and equities outperformed the U.S. and developed markets for much of this year and in the fourth quarter of 2018, driving billions of dollars of inflows, including the highest foreign inflows to Chinese assets on record to start the year.
Yes, but: Investors generally agree that the value of the dollar puts a ceiling on EM's gains because many emerging countries hold substantial dollar-denominated debt. A strengthening greenback not only makes paying back debt more expensive, it also puts pressure on EM central banks to raise rates, weighing on growth and spending.
Investors salivating over the upcoming IPOs of the LUA stocks (Lyft, Uber, Airbnb) may soon find these companies facing an onslaught of regulatory battles.
What it means: Uber has been banned outright in multiple countries and a number of U.S. cities and states, and faces partial bans in others as local governments seek to mollify taxi drivers and other unions. Lyft and Uber may also face restrictions like advertising bans, as has been proposed in Los Angeles.
The big picture: The biggest battle may be coming for Airbnb, which is taking on the hotel industry as well as a growing chorus of angry residents who don't want vacation rentals in their neighborhoods.
The New York Times' Tariro Mzezewa reports that recently Miami has cracked down on Airbnb renters, going so far as to kick them out of what are technically illegal short-term rentals in the middle of their stays.
The cops are being called by local residents who are sick of "the seemingly endless sound of suitcases rolling ... at all hours."
The bottom line: In addition to the legal costs and headaches of having to battle cities like New York and Miami that are cracking down on listings, this could end up being a major image problem for Airbnb right as it tries to woo investors for an IPO.
Consumer-driven stocks are leading the way in the market rebound since the S&P 500's Christmas Eve selloff.
What's happening: As Nicholas Colas, co-founder of research firm DataTrek, points out, many of this year's best performing stocks are "simply the names that got really clobbered" in December's sell-off.
The U.S. will account for the largest share of global oil production increases over the next 5 years, according to an International Energy Agency report released Monday.
Why it matters: Axios' Ben Geman reports that it's the latest sign analysts see room for growth in the fracking-driven U.S. boom, even after years of surging output with mixed financial returns.
By the numbers: IEA's latest half-decade forecast sees the U.S. accounting for roughly 70% of the increase in global production growth, noting the U.S. "continues to dominate supply growth in the medium term."
Other key sources of global oil supply growth over the next half-decade include Brazil, Iraq, and Guyana, where ExxonMobil and partners plan to bring some huge offshore finds into production in coming years.
The big picture: The study sees worldwide industry investment in finding and developing new supplies growing for the third straight year, but with a twist.
The intrigue: IEA also sees an inflection point in the shale patch. The world's largest energy companies, including Exxon, BP and Chevron, are playing a bigger role in the arena once dominated by independent companies. Also, some of those independents are tapping the brakes on their spending levels.
Add it all up and...
"2019 might be the first year where investment growth in shale assets passes from independents to big oil companies. This is a remarkable change for a sector which has hitherto been dominated by smaller operators," IEA said.
But, but, but: Count IEA among the mix of forecasters — both government and private — who have underestimated the extent of U.S. growth. Consider that last year's version of the annual report saw total U.S. crude production reaching around 12 million barrels per day in 2021. Turns out the country's crude output has hit that threshold already.