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Credit Suisse 1/4: Last week we outlined our reasons for expecting a period of consolidation in #G10FX, having previously been mostly #USD bearish for around 3 months, keeping our key near-term forecasts unchanged (#EURUSD 1.18, #USDJPY 105, #AUDUSD 0.72).
Credit Suisse 2/4: We highlighted factors such as extreme short USD positioning, consensus greenback bearishness and a relative shift in new negative surprises on the Covid news front away from the US and towards other centres such as the EU and Australia.
Credit Suisse 3/4: The debate around US fiscal stimulus also seems to be (very slowly) moving in the right direction towards an acceptable deal, with Senate majority leader McConnell saying he’s ready to support a package despite seeing “some problems with certain parts of it”,
Credit Suisse 4/4: removing some #USD-specific risk against other currencies in the process... In the case of #USDJPY, we argued that as long as US equity and credit markets remain well behaved, it is hard to see moves below 105 being extended,
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Francesc Riverola - FXStreet.com 🎗
@Francesc_Forex
HSBC 1/9: We hear ever more frequently that the USD is about to enter a bear market, with many market participants calling for a secular decline in the USD. We consider a number of USD bear arguments across three broad categories, but we do not find any to be convincing enough
HSBC 2/9: to suggest an imminent USD bear market:
1) Cyclical: Bear case: The USD is no longer a high yielder in G10 and the Federal Reserve (Fed) is significantly increasing USD liquidity. Investors will rebalance away from being overweight USD assets due to slowing US growth.
HSBC 3/9: Our counter-argument: Whether one uses deposit rates or various market forward starting interest rates (which indicate expected future interest rates), the USD is in the middle of the pack in G10 yields (Chart 1) and is not set to become a funding currency.
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Francesc Riverola - FXStreet.com 🎗
@Francesc_Forex
Standard Chartered 1/5: #USD – The peak is nearing
We remain neutral on the USD albeit with a slight negative bias as the uptrend appears to be coming to an end. However, we believe conditions for a reversal are not yet in place.
Standard Chartered 2/5: The USD has remained relatively resilient on the back of the US’s strong cyclical story relative to the rest of the world. Additionally, tight USD liquidity and capital flows have remained USD-supportive and could persist.
Standard Chartered 3/5: The higher US yield structure means that any US flows to the rest of the world will likely be hedged while flows into the US will likely be unhedged – which could prop the USD up in the near term. Further upside risks include an intensifying #tradewar,
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Francesc Riverola - FXStreet.com 🎗
@Francesc_Forex
HSBC 1/3: #CentralBanks: The Bank of England’s Monetary Policy Committee (#MPC) voted unanimously to keep its benchmark rate at 0.75% in September, as widely expected. It also voted to keep its asset purchase target at GBP 435bn.
HSBC 2/3: The MPC cited global weakness and the US-China trade war as weighing on the economy through weak exports, and that Brexit had weighed on business confidence and investment. Furthermore, the committee cut its growth forecast for Q3 to 0.2% from 0.3% as it signalled that
HSBC 3/3: policy rates could be cut if the UK’s departure from the EU continues to be delayed. The statement reiterated the line that rates could go in “either direction” under a no-deal break from the EU.
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