US fiscal problems have been overshadowed by Europe but HSBC expects this to change. "As we approach the US election we believe the market's attention will turn to the fiscal cliff", they say. "The US is left with the choice between two evils: fiscal austerity or more debt to an already huge pile".
"Furthermore it seems increasingly likely that the Fed will move to ease policy again soon. We expect further QE to be USD negative, partly because more easing will induce a 'risk-on' move", they add.