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 USD is running into the end of the year on a soft note.</li><li>Seasonal trends pointed that way but CAD gains have been bolstered by the stronger risk appetite, as markets price in Fed rate cuts, and firmer industrial metals the correlation table suggests.</li><li>CAD gains are running ahead of fair value but, after a sustained period of undervaluation, that trend may persist. </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 USD is running into the end of the year on a soft note.Seasonal trends pointed that way but CAD gains have been bolstered by the stronger risk appetite, as markets price in Fed rate cuts, and firmer industrial metals the correlation table suggests.CAD gains are running ahead of fair value but, after a sustained period of undervaluation, that trend may persist. 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.

External broker reports, Nordea

Nordea

External broker reports

Nordea is the bank in the Nordics dedicated to serving corporations and institutional customers. Our offering includes a diverse range of financing, cash management and payment services, investment banking, capital markets products, securities services and more. 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.

<ul><li>For Q1, we see risk/reward skewed towards paying outright. For 2024, we see risk/reward in favour of receiving outright.</li><li>Steepeners are likely to be perform from the beginning of the year and could be the trades of year if soft landing calls materialise.</li><li>Asset swap spread tightening is likely to continue in 2024, but markets may be ready ahead of January’s heavy swapped issuance, and Q1 may not be the quarter for tighteners beyond the first weeks.</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.

For Q1, we see risk/reward skewed towards paying outright. For 2024, we see risk/reward in favour of receiving outright.Steepeners are likely to be perform from the beginning of the year and could be the trades of year if soft landing calls materialise.Asset swap spread tightening is likely to continue in 2024, but markets may be ready ahead of January’s heavy swapped issuance, and Q1 may not be the quarter for tighteners beyond the first weeks.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.

EUR Rates: 2024 – ECB Cuts Are Priced Too Fast, Not Necessarily Too Far

Macroeconomics

<ul><li>We believe the FOMCs shift in reaction function sets the central bank up for a policy mistake.</li><li>The new focus on the real fed funds rate opens up for a measured pace of rate cuts (25bp per quarter) to start already in March.</li><li>However, with still very little free capacity in the economy, this rate cutting campaign will soon hit the wall as inflation problems resurface.</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.

We believe the FOMCs shift in reaction function sets the central bank up for a policy mistake.The new focus on the real fed funds rate opens up for a measured pace of rate cuts (25bp per quarter) to start already in March.However, with still very little free capacity in the economy, this rate cutting campaign will soon hit the wall as inflation problems resurface.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.

Major Forecasts: Not Keeping at It Until the Job Is Done

<ul><li>This week’s CFTC data reflect a deepening of USD bearish sentiment among investors.</li><li>Aggregate USD short positioning by Non -Commercial (speculative) accounts doubled in the week through Tuesday to reach USD6.3bn.</li><li>Additional data shows Leveraged Accounts (hedge funds) reducing net USD longs slightly but exposure is holding close to recent levels.</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.

This week’s CFTC data reflect a deepening of USD bearish sentiment among investors.Aggregate USD short positioning by Non -Commercial (speculative) accounts doubled in the week through Tuesday to reach USD6.3bn.Additional data shows Leveraged Accounts (hedge funds) reducing net USD longs slightly but exposure is holding close to recent levels.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 - Bearish USD Sentiment Grows, JPY Shorts Covered

<ul><li>So, the Fed is finished raising interest rates and given their revised outlook for lower inflation and slower growth, Fed Chairman Powell conceded that policymakers were now starting to think about when rate cuts will be appropriate.</li><li>The concession that the timing of rate cuts was now up for discussion was a more dovish development than markets were expecting.</li><li>Up until the blackout for this meeting, senior Fed officials were stressing the risk of policy remaining high for longer to combat inflation and, in that context, some pushback on market pricing for rate cuts would not have surprised yesterday.</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.

So, the Fed is finished raising interest rates and given their revised outlook for lower inflation and slower growth, Fed Chairman Powell conceded that policymakers were now starting to think about when rate cuts will be appropriate.The concession that the timing of rate cuts was now up for discussion was a more dovish development than markets were expecting.Up until the blackout for this meeting, senior Fed officials were stressing the risk of policy remaining high for longer to combat inflation and, in that context, some pushback on market pricing for rate cuts would not have surprised yesterday.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.

United States

The US dollar is the official currency of the United States of America.

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CAD Weekly Outlook - Merry CADmas

The USD is running into the end of the year on a soft note. Seasonal trends pointed that way but CAD gains have been bolstered by the stronger risk...

Scotiabank

EUR Rates: 2024 – ECB Cuts Are Priced Too Fast, Not Necessarily Too Far

Outright risks are two-way and significant with risks skewed towards receiving outright for 2024. Steepeners and asset swap spread tighteners could...

Nordea

Major Forecasts: Not Keeping at It Until the Job Is Done

With the Fed having pivoted, we now see rate cuts starting in March. But easing too soon also means inflation will resurge and put an early stop to...

Nordea

Weekly CFTC Sentiment Report - Bearish USD Sentiment Grows, JPY Shorts Covered

Aggregate USD short positioning by Non -Commercial (speculative) accounts doubled in the week through Tuesday to reach USD6.3bn.

Scotiabank

FX Daily - USD Slump Extends After FOMC

USD broadly lower in the wake of the Fed decision; more losses look likely. CAD gains on soft USD fall out. Spot loses squeeze CAD shorts.

Scotiabank

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