The FX markets are seeing an increase in volatility here. This volatility should start to spill over into other asset markets especially if the US$ sustains her recent strength. Participants are not currently positioned for volatility so if we do get a broadening here of price swings expect speculators to scramble for hedges and counter weights to their existing allocations. Remember this is in respect of all allocations e.g. even inc the short jpy position. Its just a risk adjustment this, initially.
Anyway here the latest fx reports from Friday and over the weekend. We pick up on the latest ‘mm’ reports in the next 48hr and Tuesday’s usual technical analysis run through.
Here first up Scotia picking up the FX Sentiment data.
Here from Friday CS’s daily take on the fx markets and tech levels.
And here JP with their usual fx strategy docs and picking up on the usdpln trade that some members are running at present.
And here a useful couple of reports from the MIG team.
Here their daily
And here a very nice weekly report from the team with ‘mm’ spill over from the FX markets.
With earnings season upon us, the US$ making strengthening moves, FED members sounding the most hawkish they have sounded for some time and equity bullishness still at extremes we could be setting up for an interesting week.Tech wise, some key levels in the FX have already been crossed having been setting up for this move for some time now.
Good luck to all
Rich