US CPI bang in line: nothing changes in my view – stand down and as you were.

On my radar in North America session:

Risk plays yesterday never far away with Trump rattling his sabre – markets not that bothered though suggesting they see through it.  I’m still bearish USD – albeit tight ranges. I was on Coretv last Friday when EURUSD was 1.2240 and my view stands firm as we crack the 1.24 big fig.

An equity wobble should support EURUSD (IF) carry trades get unwound. In simple terms EURUSD has been sold to buy risky assets. The reverse will mean buying. If you think this won’t happen look at The China credit crisis moves in 2016.

USD leg has on going problems: DXY below 91, curve all over the place (don’t get me started) and bond titan Gundlach thinks yields will break 3.15% but sees USD spot lower. This does not make macro sense – but who am I to argue ?

All helps with the divergence and more pain for differential traders. Actually do they still exist ? LOL

Ours is not as to reason why – all we do is sell and buy.

Patrick Reid
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