Outlook: There are key changes in the landscape going into 2H22. The global hawkish wave is testing even the most dovish central banks (SNB, BoJ) and tightening financial conditions. Meanwhile, late cycle anxieties are rising and market liquidity has plummeted. A re-emergence of carry and value opportunities provides some insulation, but don’t make FX immune from such risks, particularly when combined with lingering uncertainties (EU's energy dependence, China’s zero COVID) and still inexpensive vol. Increase previously held defensive exposure. Stay long USD, upsize CHF longs. Bias on JPY has shifted. USD/JPY still projected to be higher in baseline, but focus is now on JPY-crosses as attractive late cycle hedges.