#citifx flows

[fxasker-blog]

HOW DO I UPLOAD DOCUMENTS TO CFHSystems MANAGEMENT?

HOW DO I UPLOAD DOCUMENTS TO CFHSystems MANAGEMENT? Read More http://fxasker.com/question/f88be181f9c5cb79/ FXAsker

[its-veso]

USD: Hedge Funds On The Short Side; USD Sell-Off Begins 1-2 Months Ahead Of Fed Rate Cuts – Citi

Markets are pricing in two rate cuts from the Federal Reserve this year. What does it mean for the dollar?

Citi discusses the USD outlook and notes that Fed rate cut expectations are likely to keep USD on the defensive, while the greenback also faces challenges ahead of major US releases this week, including May retail sales, Industrial Production and CPI.

“USD longs remain at risk, as per the CitiFX Flows & Positioning Indicator that shows leveraged (hedge fund) selling of USD.

History also shows that USD sell offs begin some 1-2 months prior to Fed rate cuts (most analysts now see the Fed cutting in July) leading to USD weakness by around 3.5% on average (so far, the USD Index (DXY) has fallen a little over 1.1%),” Citi notes.

“This week’s US May CPI is likely to garner most attention given how critical it is to Fed rate cut expectations. Citi analysts expect a solid 0.21%MoM rebound in May with weakness in transitory factors likely moderating while underlying components of inflation remain solid,” Citi adds.

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[its-veso]

USD: Investor Flows Remain USD Negative; More Real Money USD Selling To Come? – Citi

The US Dollar is looking for a new direction after a few turbulent days. What’s next?

Citi discusses USD outlook and notes that investor flow remain overall USD negative.

“The Citi CitiFX Flows team notes net USD outflows by real money (RM) investors over the past 3-weeks which follow a long period of net buying.

The shift in USD RM flows coincides with the mid-December downturn in USD and more dovish Fed speak,” Citi notes.

Citi also notes the US govt shutdown continues to be one of the factors weighing on USD sentiment (albeit in the short term).  

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[its-veso]

EUR/USD loses ground – where next?

The euro has surrendered to the strength of the US dollar. EUR/USD is slipping under 1.19. What’s next?

Here is their view, courtesy of eFXnews:

EUR/USD: Still In The Bottom Half Of 1-1.25 & Valuation Still Matters – SocGen

Societe Generale Cross Asset Strategy Research notes that EUR/USD is still stubborn as the Treasury sell-off has lost momentum ahead of US CPI/retail sales this week.

“The euro has bounced from very cheap to cheap, and the valuation matters. We’re still in the bottom half of a 1-1.25 range even if we’ve rise too fast,” SocGen argues. 

“The ECB needs the Fed to push on with balance sheet reduction, and then get some done without the world ending, if they’re going to be able to taper. Escaping QE-infinity and the low rate trap requires all the big CBs to go for it (more, faster) before the global cycle loses momentum,” SocGen adds.

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EUR/USD: A Setup For An Ideal Short – SEB

SEB FX Strategy Research argues that much of the recent euro upturn is driven by a weaker dollar and weaker Fed expectations.

“Speculative flows are near record-long EUR/USD, while there is little to suggest that long-term structural flows have been kick-started already. Expectations about the Fed are very muted (1 hike over the coming 18 months) and SEB expects another 4 rate hikes until end-2018,” SEB adds.

“We would use levels above 1.21 to initiate a short EUR/USD trade as we expect EUR/USD to decline towards 1.17 in 3-6 months,” SEB advises.

EUR/USD: Triple Negative Divergence; A Close Below 55d MA Key – Citi

CitiFX Technical Strategy Research notes that EUR/USD charts suggest a triple negative divergence which reflects a weakness in the uptrend at least in the short term.

“Trendline support or channel base is at 1.1754.

We would need to see a close below there and below the 55 day moving average (currently at 1.1704) before confirming any bearish break but the very near term risk is to see a pullback,” Citi adds.

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from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/Z82H_cXxOow/

[its-veso]

Citi Trade Of The Week: Sell GBP/NZD

Currency investors should consider selling GBP/NZD this week, advises CitiFX Strategy Research in its weekly pick.

"GBP may be vulnerable approaching the MPC meeting....Citi Economics expect just two dissents and more confidence among the core members that the slowdown they anticipated justifies keeping rates on hold in the face of stronger inflation prints.

NZD sensitivity to even weak positive catalysts may be heightened given market positioning...This may leave some investors poorly positioned for more positive news flow," Citi says as a rationale behind this call.

Source: Citi Research

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from eFXNews http://feedproxy.google.com/~r/Efxnews/~3/1U2yIyC8Lf8/citi-trade-week-sell-gbpnzd

[its-veso]

USD/JPY – is it on the up and up? 3 opinions

USD/JPY is trading at the 111 handle, in the middle of the 108.10 to 114.30 range. The pair well represents the ebb and flow in the US dollar. What’s next? Here are some opinions?

Here is their view, courtesy of eFXnews:

BNPP Trade Of The Week: Buy USD/JPY

Currency investors should consider buying USD/JPY to position for a tactical USD rebound this week , advises BNP Paribas Research in its weekly FX pick.

“We think the USD could rebound this week with several speeches from Fed officials including Fed chair Yellen on 27 June as well as Williams, Harker, Kashkari and Bullard. We expect the Fed to announce the start of its balance sheet reduction program in July, so Fed speakers could start signalling this shift in the near term.

Markets could quickly price in more tightening as market expectations for Fed tightening remain very subdued, with only one further 25bp rate hike priced by the end of 2018. US 10y nominal rates are only moderately above their lows ahead of the June FOMC meeting,” BNPP argues.

USD/JPY is trading circa 111.40 as of writing.

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USD/JPY: Attempting Double Bottom On Weekly Charts: Levels & Targets – Citi

CitiFX Technical Strategy Research notes that USD/JPY posted a bullish outside week last week indicating higher levels ahead.

“The setup forming looks to be a double bottom which has previously given signs of a decent rally – in both early 2012 and again last year.

The key level to watch is 114.37. A weekly close above there would confirm the setup and indicate a rally to almost 120,” Citi adds.

USD/JPY is trading circa 111.25 as of writing.

USD: Will The USD Be Vulnerable Another ‘Lowflation’ Week? – Nordea

Nordea FX Strategy Research notes that this week’s PCE-price data (Thu) is one chance for the market to reassess the Fed outlook.

In that regard, Nordea thinks that this week’s PCE deflator print is unlikely to be a hawkish game-changer this month, but still believes that the recent downtrend in US inflation is of a transitory nature, as June is the peak month for the negative FX impulse for import prices.

“Also judged by other indicators, June could be the trough in inflation..The ECB is still looking for an upward trend in core inflation. The super-core inflation measure, which is constructed to correlate with the amount of economic slack in the economy, is yet to show a trend,” Nordea adds.

“Given recent flows and positioning trends, the EUR looks more vulnerable to weak data short term than the USD,” Nordea argues.

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[its-veso]

USD: Less Supportive Environment; EUR: Weakness To Re-Emerge On Crosses - Citi

CitiFX Strategy Research notes that markets are likely starting to discontinue the potential speed and scope of the US tax reforms as expectations for substantive moves on tax and fiscal policy in the months ahead have receded among many investors.

"This implies a less supportive environment for USD," Citi argues. 

On the EUR front, Citi still holds the view that the single currency is likely to see range trade in the days ahead as investors could be reluctant to take positions ahead of the French election.

In that regard, Citi notes that its flows metrics suggest EUR weakness to resume on crosses under position reductions. 

EUR/USD is trading circa 1.0726, and USD/JPY  is trading circa 108.54 as of writing. 

Source: Citi Research

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from eFXNews http://feedproxy.google.com/~r/Efxnews/~3/j4PyjeEAzHE/usd-less-supportive-environment-eur-weakness-re-emerge-crosses-citi

[its-veso]

Can EUR/USD sustain its gains this time?

EUR/USD enjoyed the dollar’s weakness to rise above the limited range that confined it recently. But can it extend to higher ground or is it set to slide? Here are two opinions:

Here is their view, courtesy of eFXnews:

EUR/USD: Unplugged But Recharging; Where To Target? – Danske

Danske Bank FX Strategy Research believes that EUR/USD will stay within the 1.04-1.10 on a 3-month horizon.

However, in the near-term, Danske sees EUR risks mainly on the downside as (i) the Fed is set to become somewhat less accommodative than the market is pricing at present, and (ii) ECB will have to scrap exit discussions and extend QE (delivering no deposit-rate hike) as a drop in inflation ahead will increase the pressure for more easing.

Longer term, Danske maintains that fundamentals such as valuation and current account balances remain supportive and will drag EUR/USD higher down the road.

“Thus the cross is set to be range-bound near term and we have pencilled in some limited downside near term,” Danske argues.

Danske now targets EUR/USD at 1.06 in 1-month and 3-month, and targets a broad rally towards 1.14 in 12-month.

EUR/USD is currently trading circa 1.0730 as of writing.

USD: Less Supportive Environment; EUR: Weakness To Re-Emerge On Crosses – Citi

CitiFX Strategy Research notes that markets are likely starting to discontinue the potential speed and scope of the US tax reforms as expectations for substantive moves on tax and fiscal policy in the months ahead have receded among many investors.

“This implies a less supportive environment for USD,” Citi argues.

On the EUR front, Citi still holds the view that the single currency is likely to see range trade in the days ahead as investors could be reluctant to take positions ahead of the French election.

In that regard, Citi notes that its flows metrics suggest EUR weakness to resume on crosses under position reductions. 

EUR/USD is trading circa 1.0726, and USD/JPY  is trading circa 108.54 as of writing.

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