Major Bank Daily Position
AUD/USD - UOB - LONG Limit Order - Adjusted -
Stop from 0.7470 to 0.7495, Entry: unch., Target: unch. (S/T)
USD/CAD - Citi - SHORT Limit Order - Placed -
Entry: 1.3450, Target: 1.3150, Stop: 1.3600 (TOTW-M/T)
USD/CAD - Citi - SHORT Limit Order - Filled -
Entry: 1.3450 - Target: 1.3150, Stop: 1.3600 (TOTW-M/T)
Barclays
Barclays expects the Fed to raise the
target range for the federal funds rate by 25BP to 1.00 – 1.25% at its June
meeting this week.
Although some details may be lacking, we
expect the message on balance sheet policy to be clear, consensus has been
reached and runoff is likely to begin soon.
Given our expectation of a rate hike in
June and balance sheet run off in September, we find it unlikely that the Fed
will deliver a dovish message on the outlook.
Trade Of The Week: Short USD/INR
“We recommend short USDINR NDF targeting 64.15
(ref1m NDF:64.6, SL 64.8). INR is one of our favourite carry currencies,
supported by positive investor sentiment, on going reforms, improving trade
data and low volatility. We do not expect any upset to risk sentiment by Fed
this week, which should bode well for high yielders.
“A less hawkish RBI, improving trade data
and no upsets to risk sentiment by the Fed should support INR, while we think
market is underestimating the likelihood of a 50bp cut in Russia.
SocGen
EUR/USD has taken hape at the down slanting
channel support at 1.035
“The pattern’s validation level stands at
1.086/1.08 which also coincides with multiyear graphical levels.
Thus, EUR/USD looks poised to head higher
initially towards the down channel’s upper band at 1.146, also the 2015/2016
highs and 23.6% retracement of the down move since 2011 peak.
It is then set to move towards
1.1685/1.1714, the August 2015 high and the 23.6% retracement of the entire
cycle. Graphical levels at 1.1875/1.2043 will represent a key hurdle ahead.
CIBC
CIBC notes that while EUR has rallied this
year, it didn’t get any help on that path from the ECB this week.
“While policy makers are no longer
suggesting rates could be cut again, there weren’t any signals towards tapering
QE later in the year or rate increase in 2018. However, we still see the EU
economy progressing well, which will enable a reduction of stimulus later this
year or early 2018,” CIBC adds.
“As such the recent pullback in EURUSD
should reflect better values for long positions to be reestablished, as we see
it rising to 1.18 by end 2018.
BNPP
Trade Of The Week
We recommend to short AUDUSD because we
think USD could rally this week as markets will refocus on Q2 economic data and
medium term picture.
Our economists think the language on the
balance sheet is likely to change at the Fedmeeting, setting up a formal
balance sheet reduction announcement in September.
Citi
Trade Of The Week
Citi recommends selling USD/CAD around 1.345 targetting
1.315 with a stop at 1.36
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