Major Bank Daily Position
USD/CAD -
Citi - SHORT Position - From 1.3450 - Adjusted - Stop from 1.3600 to 1.3350,
Target: unch. (TOTW-M/T)
USD/CAD -
Citi - SHORT Position - From 1.3450 - Closed at market at 1.3235 (TOTW-M/T) +215
pips
USD/CAD -
TD Bank - SHORT Position - From 1.3700 - Adjusted - Stop from 1.3600 to 1.3250,
Target: unch. (M/T)
AUD/USD -
Morgan Stanley - SHORT Position - From 0.7540 - Stopped out at 0.7570 (M/T) -30
pips
| USD/CAD - TD Bank - SHORT Position - From 1.3700 - Hit Target at 1.3200 (M/T) +500 pips |
CACIB
CACIB notes over the past year, every week that the BOJ and
FOMC have had meetings in the same week, the JPY strengthened.
However, CACIB argues that as the market is already priced
for a dovish hike from FOMC, this reduces the risk of a repeat of history and
could lead to a relief rally in USD/JPYpost the FOMC meeting.
Nonetheless, CACIB also notes that there are reports that
the BOJ is considering changing its communications to acknowledge that it is
thinking about how to handle a future exit from monetary stimulus, without
giving the impression that this is on the agenda anytime soon.
Our economist think that this week’s BOJ monetary policy is
not likely the right place for outlining an exit strategy, however “A data
dependent Fed should wait at least one meeting to confirm to confirm that
recent weakness is only temporary. However, that meetings in the October or
December, when the Boj issues it’s Outlook Report, would be more likely forum
for such an announcement.
Danske
Danske sees the Fed skipping hiking at tomorrow’s meeting
and instead announcing the triggers for Quantitative tightening (QT).
However, danske argues that such an outcome should be USD
positive and it should lead the start of a correction in EUR/USD over the
summer.
“For EUR/USD, a hawkish stance from the Fed would come at a
time where the ECB has admittedly moved a tad closer to neutral on rates but at
the same time laid out an inflation outlook that deters Draghi and co from
looking for an easing exit anytime soon. IN our view, this makes the period
where EUR/USD could move to the lower end of its newfound 1.08 – 1.13 range.
Should Fed refrain from hiking in June, the knee-jerk
reaction will most likely send EUR/USD higher but we do not expect a level
above 1.13. However, in our base case that a summer hike will come if not June,
July. We think as markets digest the boldness with which we think the FOMC will
move near term, USD strength will materialize for a while.
In line with this view, Danske remains tactically short
EUR/USD targeting 1.09 3M but sees level below 1.1 atrractive for positioning
for a renewed uptick towards the end of the year.
NAB
NAB expects a quarter point lift to the Fed Funds rate at
the FOMC June meeting and argues that any thing other than retention of the end
2017 median dot at 1.375% would be a major surprise.
If no upsets here, then what if anything happens to the 2018
dots and the narrative surrounding them in Yellen’s post FOMC press conference
should be important.
If the Fed highlights that the medium term outlook for
inflation or rates has not really changed despite recent softer data, there is
potential for the USD to rally out of the FOMC.
However, NAB argues that a substantial USD rally will likely
require string US data over the coming months.
We continue to expect this, hence our bullish USD H2 2017
forecasts, for all bar EUR/USD.
CIBC
CIBC notes that EUR/USD fair model is estimated around 1.29
and expects to see the exchange rate reach 1.17 by year end.
“Over that time, look for ECB hawks to keep pounding the
table and the doves to have less reason to pump stimulus into the system.
Furthermore, the Eurozone’s large table surplus will provide
a tailwind to the currency at a time when a detiorating trade balance from the
US is doing the exact opposite to the greenback.
CIBC targets EUR/USD at 1.14, 1.16, and 1.17 by end of Q2,Q3
and Q4 of 2017.
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