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

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

<ul><li>Early January trading saw little change in FX market positioning, according to the latest CFTC data.</li><li>Broad, USD bullish sentiment persists but the build-up in USD long positioning slowed among Non-Commercial (speculative) accounts—perhaps not too surprisingly.</li><li>Aggregate USD longs increased USD874mn over the past week to reach a total of USD34.6bn—the biggest speculative bull punt on the USD since H1 2018. </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.

Early January trading saw little change in FX market positioning, according to the latest CFTC data.Broad, USD bullish sentiment persists but the build-up in USD long positioning slowed among Non-Commercial (speculative) accounts—perhaps not too surprisingly.Aggregate USD longs increased USD874mn over the past week to reach a total of USD34.6bn—the biggest speculative bull punt on the USD since H1 2018. 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 - Bullish Sentiment Build for USD Slows

<ul><li>Firm US yields, still supportive spreads, bullish seasonal trends and the impending inauguration of President-elect Trump provide solid support for the USD bullish narrative driving markets into the early stages of 2025.</li><li>Yields and policy differentials explain a lot of the dollar’s overall performance in 2024.</li><li>The DXY tracked our spread-based fair value estimate very closely for much of the 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.

Firm US yields, still supportive spreads, bullish seasonal trends and the impending inauguration of President-elect Trump provide solid support for the USD bullish narrative driving markets into the early stages of 2025.Yields and policy differentials explain a lot of the dollar’s overall performance in 2024.The DXY tracked our spread-based fair value estimate very closely for much of the 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.

FX Snapshot - USD Bullish Narrative Persists but Positioning Is Crowded

<ul><li>USD bullish sentiment extended in the first trading week of the new year—much as the old year ended. Non-Commercial (speculative) accounts increased aggregate USD longs some USD2.3bn to total USD33.7bn overall, extending the steady ramp up in bullish USD positioning seen since last September.</li><li>Aggregate speculative USD longs have surpassed the April 2024 peak bullishness (net longs of USD32.6bn) to near the April 2019 peak of USD32.8bn.</li><li>Additional data shows Leveraged (hedge fund) traders increased net USD longs by some USD2bn while Institutional (real money) investors held net USD longs steady around USD13.3bn. </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.

USD bullish sentiment extended in the first trading week of the new year—much as the old year ended. Non-Commercial (speculative) accounts increased aggregate USD longs some USD2.3bn to total USD33.7bn overall, extending the steady ramp up in bullish USD positioning seen since last September.Aggregate speculative USD longs have surpassed the April 2024 peak bullishness (net longs of USD32.6bn) to near the April 2019 peak of USD32.8bn.Additional data shows Leveraged (hedge fund) traders increased net USD longs by some USD2bn while Institutional (real money) investors held net USD longs steady around USD13.3bn. 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 Speculative Sentiment Builds

The Canadian dollar is the official currency of Canada. 

<ul><li>The CAD is ending the week with a small net gain versus a generally strong USD, outperforming is core G10 and most of its commodity peers.</li><li>The CAD was also one of the least volatile major currencies this week as the USD pivoted narrowly around 1.44.</li><li>The USD popped higher on the back of stronger than forecast jobs data but the CAD remained resilient, making marginal gains on solid-looking Canadian employment report for December</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 CAD is ending the week with a small net gain versus a generally strong USD, outperforming is core G10 and most of its commodity peers.The CAD was also one of the least volatile major currencies this week as the USD pivoted narrowly around 1.44.The USD popped higher on the back of stronger than forecast jobs data but the CAD remained resilient, making marginal gains on solid-looking Canadian employment report for DecemberContent 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.

CAD Weekly Outlook - CAD Steady as Uncertainty Mounts

<ul><li>Firm US yields, supportive spreads, bullish seasonal trends and the impending inauguration of President-elect Trump provided solid support for the USD bullish narrative driving markets into the New Year.</li><li>Or so I—and many market participants—thought.</li><li>I had noted a significant USD overvaluation relative to its estimated equilibrium measure in my updates late last week.</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.

Firm US yields, supportive spreads, bullish seasonal trends and the impending inauguration of President-elect Trump provided solid support for the USD bullish narrative driving markets into the New Year.Or so I—and many market participants—thought.I had noted a significant USD overvaluation relative to its estimated equilibrium measure in my updates late last week.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.

FX Snapshot - A Needle Scratch in the USD-Positive Narrative