CIBC FICC Strategy: FX Files – Eeyore’s Market

FICC Strategy Reports

Into the start: North American equity futures are on the defensive taking their cue from equities in Asia/Europe. Core rates are bid – with 10-year UST yields falling below 150bps. Oddly enough – peripheral spreads in the Eurozone continue to widen. I suspect this is a reaction to recent talk surrounding PEPP, but it is an ominous sign for the ECB. Prompt crude oil/nat gas contracts are sniffing new multi-month lows here. The USD is actually underperforming. Again, I chalk this up to more of a position-rebalance than the greenback losing it’s safe haven appeal. Remember that ‘risk-off’ means that extant positions are squared – and USD longs have been the most popular trade for some time now.

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