Major Bank Daily Position
USD/CAD - Crédit Agricole - LONG Limit Order -
Placed - Entry: 1.3190, Target: 1.3800, Stop: 1.2950 (M/T)
USD/CAD - Crédit Agricole - LONG Limit Order -
Filled - Entry: 1.3190 - Target: 1.3800, Stop: 1.2950 (M/T)
AUD/USD - Deutsche Bank - SHORT Limit Order -
Filled - Entry: 0.7600 - Target: 0.7000, Stop: 0.8000 (L/T)
EUR/GBP - Citi - LONG Limit Order - Placed -
Entry: 0.8775, Target: 0.9100, Stop: 0.8675 (S/T)
EUR/USD - Nomura - LONG Position - From 1.0845
- Adjusted - Stop from 1.1100 to 1.1145, Target: unch.
EUR/GBP - Citi - LONG Limit Order - Filled -
Entry: 0.8775 - Target: 0.9100, Stop: 0.8675 (S/T)
USD/CAD - ABN-AMRO - SHORT Position - From
1.3455 - Adjusted - Stop from 1.3800 to 1.3455, Target: unch. (L/T)
EUR/USD - Nomura - LONG Position - From 1.0845
- Hit Profit-Stop at 1.1145 +300
pips
Danske
Danske warns of the risk that a perfect storm may hit USD
liquidity in H2 2017.
“Besides Fed rate hikes and quantitative tightening the US
treasury will likely soon begin to drain liquidity from the market, when a
solution to the debt limit issue is found. US treasury exhausts it’s
extraordinary measure possibly early autumn so Congress must either lift or
suspend the debt limit soon to avoid a US government default.
As we expect a deal to be reached eventually, the US
Treasury will likely to begin to rebuild its cash buffer (which aims at USD 150
– 450 bn) in late Q3 or in the beginning of Q4 this year, thus draining dollars
from the system.
As the Fed may be too optimistic about its ability to shrink
its balance sheets, we see a risk of the start of an unwarranted tightening of
USD liquidity over the coming 3-12M depending on the timing of the start of the
reduction. That should widen the EUR/USD XCCY basis and be a negative
contributing factor for EUR/USD, especially now that 40% of the reduction is
conducted by ceasing reinvesting mortage backed securities.
In line with this view, Danske stays tactically short
EUR/USD in its portfolio for a dip below 1.1 in the cross over the summer
driven by a Fed determined to move on with policy normalization and an ECB that
could be side-lined for a while as inflation and Eurozone growth lose momentum.
SocGen
SocGen notes that US rates trundling slowly higher and bond
yields firmly in a range.
“That level makes USD/JPY look a bit low and as markets calm
down, the yen should weaken again. EUR/JPY remains a very attractive buy here.
But the big market driver may be less where TIPS go than where yields go
elsewhere.”
For now, EUR/USD seems to have a hard ceiling at 1.13 but if
we see positions lighten up somewhat while meandering in the current mini range
(1.115 – 1.13?) then we will make a base from which to push higher.
Nordea
Nordea comments on the outcome of today’s FOMC decision in
which the Fed raised the Fed funds target by 25bps to a range of 1% to 1.25%
and outlined how they will proceed with balance sheet normalization later this
year.
Our view: with no major surprises from the Fed we stick to
our forecast that the Fed will hike rates again in September and that the bank
will start its balance sheet adjustment in December.
The risk to this call is that ongoing soft inflation prints
delay the rate hike and subsequently the balance sheet runoff.
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