The response of the US dollar and Treasuries to Israel's attack on Iran and the palatable risk of escalation was uninspiring. It supports the popular narrative about the changing role of the US dollar and assets in the world economy. US stocks and bond sold off ahead of the weekend. It should not be regarded as a "smoking gun" but part of an incremental addition to the accumulating evidence. The G7 meeting in Canada (June 15-17) may command attention, but if it can agree on a statement, it will be likely be so bland to express the divergence of views (and the apparent isolation of the US) that it likely have ... (full story)