External broker reports(aggregated public sources), Scotiabank

Scotiabank

External broker reports(aggregated public sources)

Scotiabank’s global foreign exchange strategy team provides in-depth regional insights and macro-economic analysis for G10 and advanced economies, Asia Pacific, and Latin America. Find technical and fundamental strategy reports focused on trade ideas, market risks, and the unfolding macro outlook. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

FX & Rates

<ul><li>The headline changes in USD positioning is the latest week’s Commitments of Traders Report are relatively limited.</li><li>Aggregate Non-Commercial (speculative) net USD longs are little changed after the prior week’s significant advance, falling USD291mn in the week to USD8.48bn.</li><li>This is still close to the most bullish positioning on the USD in a little under a year. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The headline changes in USD positioning is the latest week’s Commitments of Traders Report are relatively limited.Aggregate Non-Commercial (speculative) net USD longs are little changed after the prior week’s significant advance, falling USD291mn in the week to USD8.48bn.This is still close to the most bullish positioning on the USD in a little under a year. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Weekly CFTC Sentiment Report - USD Bullish Sentiment Consolidates

<ul>
<li>CFTC data for the week through July 18th reflect a significant deterioration in USD sentiment.</li>
<li>Speculative Accounts’ overall positioning against the USD versus the major currencies reflected an aggregate short position of USD 19.9bn in the latest week.</li>
<li>The week-over-week increase in aggregate USD shorts of USD7.4bn was the largest single week positioning shift against the USD since 2020. </li>
</ul>
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


CFTC data for the week through July 18th reflect a significant deterioration in USD sentiment.
Speculative Accounts’ overall positioning against the USD versus the major currencies reflected an aggregate short position of USD 19.9bn in the latest week.
The week-over-week increase in aggregate USD shorts of USD7.4bn was the largest single week positioning shift against the USD since 2020. 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Global FX Strategy - USD Sentiment Deteriorates Sharply

Founder

Olivier Desbarres

Exacting. Excellent. Exceeding. Exemplary.

4X Global Research

4X Global Research was founded in 2017 to provide institutional and corporate clients with the substantive research, high-quality analysis and thoughtful insight on Emerging and G20 economies and financial markets they need to make informed and timely decisions and gain an edge in their investments.

<ul>
<li>Russian invasion of Ukraine on 24 Feb has generated much uncertainty and financial market volatility, including in FX markets. </li>
<li>Some asset prices have moved broadly as “expected”, with Rouble, Euro and global equities down and Dollar,  gold and fossil fuel prices up. </li>
<li>But other asset prices have been range bound in past fortnight, including S&amp;P 500, Treasury yields and a number of Asian currencies, or held their own (AUD and NZD).</li>
</ul>


Russian invasion of Ukraine on 24 Feb has generated much uncertainty and financial market volatility, including in FX markets. 
Some asset prices have moved broadly as “expected”, with Rouble, Euro and global equities down and Dollar,  gold and fossil fuel prices up. 
But other asset prices have been range bound in past fortnight, including S&amp;P 500, Treasury yields and a number of Asian currencies, or held their own (AUD and NZD).


In the past couple of months governments in Asia-Pacific have materially accelerated the administration of Covid-19 vaccines.But because of low starting points, vaccination rates remain low compared to the EU, US and UK and even a number EM economies (including Turkey). The exceptions are Korea, Malaysia and Japan which have now administered a similar number of doses per capita as the US, while Singapore has pulled further ahead. In countries where governments started to vaccinate early such as the US and in particular the UK, vaccine roll-outs have slowed materially in the past nine weeks. These countries are taking additional measures to encourage those not yet vaccinated to do so and there is talk of jabs for under-18s and of booster jabs at least for the most vulnerable.The picture for the increase in Covid-19 deaths since early July is even more granular. In countries where governments started vaccinating early and now have high rates of vaccination, including the UK, US and EU, the number of deaths has perhaps unsurprisingly increased only marginally. The rate of increase and total number of deaths remain negligible in New Zealand despite a sill modest vaccination roll-out. It has to varying degrees been a similar situation in Australia, Korea, Japan, Singapore and Taiwan.The increase in deaths has also been modest in India and Philippines, albeit from a higher starting point. The increase in deaths has been far higher in Indonesia, Malaysia and in particular Thailand.  Vaccination rates are a critical variable from a health and economic perspective but their direct impact on currencies has been mixed.New Zealand Dollar has outperformed but is not particularly expensive in our view. Going forward we would expect it to remain well supported even if still vulnerable to pull-backs.

In the past couple of months governments in Asia-Pacific have materially accelerated the administration of Covid-19 vaccines.But because of low starting points, vaccination rates remain low compared to the EU, US and UK and even a number EM economies (including Turkey). The exceptions are Korea, Malaysia and Japan which have now administered a similar number of doses per capita as the US, while Singapore has pulled further ahead. In countries where governments started to vaccinate early such as the US and in particular the UK, vaccine roll-outs have slowed materially in the past nine weeks. These countries are taking additional measures to encourage those not yet vaccinated to do so and there is talk of jabs for under-18s and of booster jabs at least for the most vulnerable.The picture for the increase in Covid-19 deaths since early July is even more granular. In countries where governments started vaccinating early and now have high rates of vaccination, including the UK, US and EU, the number of deaths has perhaps unsurprisingly increased only marginally. The rate of increase and total number of deaths remain negligible in New Zealand despite a sill modest vaccination roll-out. It has to varying degrees been a similar situation in Australia, Korea, Japan, Singapore and Taiwan.The increase in deaths has also been modest in India and Philippines, albeit from a higher starting point. The increase in deaths has been far higher in Indonesia, Malaysia and in particular Thailand.  Vaccination rates are a critical variable from a health and economic perspective but their direct impact on currencies has been mixed.New Zealand Dollar has outperformed but is not particularly expensive in our view. Going forward we would expect it to remain well supported even if still vulnerable to pull-backs.

US Treasury yields and the Dollar, perhaps unsurprisingly, have risen in the wake of today’s strong US labour market report. However, we think it would be a stretch to argue that markets have “hard-baked” in their view that the Federal Reserve will announce its tapering plans potentially as early as the Jackson Jackson Hole Symposium on 26-28 August. A case perhaps of once bitten twice shy and for good reason in our view.We have been moderately bullish the GBP/EUR cross since late-June and the cross briefly traded above 1.18 this afternoon, its strongest level since February 2020. We maintain a positive outlook in the remainder of Q3. The Kiwi Dollar has been the fourth strongest major currency since the Federal Reserve’s policy meeting on 16th June. The Kiwi Dollar NEER has so far in August appreciated about 0.9%, confounding historical patterns which on average in 2010-2019 saw the currency weaken 0.9% in the month of August. However, the currency may not fare quite as well in Q4, in our view – the theme of our next FIRMS report.Conversely, the Thai Baht has underperformed but it’s not just been a tourism issue.

US Treasury yields and the Dollar, perhaps unsurprisingly, have risen in the wake of today’s strong US labour market report. However, we think it would be a stretch to argue that markets have “hard-baked” in their view that the Federal Reserve will announce its tapering plans potentially as early as the Jackson Jackson Hole Symposium on 26-28 August. A case perhaps of once bitten twice shy and for good reason in our view.We have been moderately bullish the GBP/EUR cross since late-June and the cross briefly traded above 1.18 this afternoon, its strongest level since February 2020. We maintain a positive outlook in the remainder of Q3. The Kiwi Dollar has been the fourth strongest major currency since the Federal Reserve’s policy meeting on 16th June. The Kiwi Dollar NEER has so far in August appreciated about 0.9%, confounding historical patterns which on average in 2010-2019 saw the currency weaken 0.9% in the month of August. However, the currency may not fare quite as well in Q4, in our view – the theme of our next FIRMS report.Conversely, the Thai Baht has underperformed but it’s not just been a tourism issue.

New Zealand

The New Zealand dollar is the official currency of New Zealand.  

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Weekly CFTC Sentiment Report - USD Bullish Sentiment Consolidates

Aggregate Non-Commercial (speculative) net USD longs are little changed after the prior week’s significant advance, falling USD291mn in the week to...

Scotiabank

Global FX Strategy - USD Sentiment Deteriorates Sharply

Speculative Accounts’ overall positioning against the USD versus the major currencies reflected an aggregate short position of USD 19.9bn in the...

Scotiabank

Market Snapshot, Theatre of War

Amidst carnage in financial markets, some assets - inc US Treasury yields, some Asian and high-yielding EM currencies, AUD & NZD and even S&P 500 -...

Olivier Desbarres

Vaccination and Currency Immunity

Vaccination rates matter but for some Asia-Pacific countries, economies and currencies they are not proving to be a panacea.

Olivier Desbarres

FX Focus: USD, GBP, NZD and THB

US yields and USD have risen following strong US labour mkt report but still not clear markets expect Fed to announce tapering plans in coming...

Olivier Desbarres

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