AccuTrade2000

AccuTrade2000

Larger, not priced, and coming at a bad time The tariffs are: Larger than expected : Trump's proposals are likely to raise the weighted average tariffs on US imports from 2.5% as of end 2024 to 24%, levels not seen since the 1920s. Both the magnitude of ‘reciprocal’ tariffs imposed per country and the set of countries they were imposed on were larger than many...

AccuTrade2000

Risk traded offered yesterday, and CAD was no exception as tariff risks continue to linger for now. As I have been writing here for a while, I did not think USDCAD had enough risk premium priced in ahead of this week, so I have been running a long position in the pair for quite some time now. This has finally started to work with the pair moving back above 1.4400...

AccuTrade2000

Month-end not providing us with too many fireworks; however, it generally saw CHF trade with an offered tone. This took CHFJPY briefly below 169 and towards 168.80 support, although we find ourselves higher today. I continue to hold CHFJPY shorts; however, I would be frustrated to see the pair back on a 170 handle and towards the 100-day at 170.84. The view here...

AccuTrade2000

Pretty volatile few sessions in stocks and bonds of late, dragging USDJPY around, but crucially the mega resistance zone into the 151 handle held unscathed. GPIF allocations were confirmed as unchanged yesterday in line with the Nikkei leak a few weeks ago and had little impact, while the data have been generally favourable with a beat in Tokyo CPI and a solid...

AccuTrade2000

There have been spillovers of flow in the past coming into the first session of the month, but we have now passed the much-hyped rebalancing period, and over the past week or so, we have seen a very large amount of USD buying led by the real money sector (corporates also chipped in). Hard to say whether this is rebalancing related, but what I would say is that the...

AccuTrade2000

The drawbacks of the clawbacks. Our view from price action and client conversations is that markets think tariffs will be less durable than some of the other policy shifts that are more negative for the Dollar, and there is nothing in the contours of the tariff announcements we expect next week that will change that. Our economists expect a high initial headline,...

AccuTrade2000

CHF at the mercy of broader risk sentiment and the dollar, with both EURCHF and USDCHF chopping around in recent ranges. There are a lot of reasons to be bearish CHF, given the dovish SNB, it is one of the lowest yielding currencies, Swiss pharma could be in the firing line for tariffs, fiscal impetus in Germany and decent sized CHF longs out there, however CHF is...

AccuTrade2000

Tokyo inflation printed higher than expected overnight with the YoY measure coming out at 2.2% versus 1.9% expected, a move lead by transport, household goods and clothing. The yen has traded with a bid tone since, a move aided by a slightly more hawkish Summary of Options for the March MPM. Auto tariffs which were the main driver of the mover higher in USDJPY...

AccuTrade2000

Another tiring week if honest, just want to get to April 2nd and whilst it may not be a straightforward interpretation of what is to come at least it will provide some firmer ground on which to think about the world. Judging the price action this week is tricky given rebalancing effects, but stand back I do think things hold in rather well all told and would have...

AccuTrade2000

Trump delivered on his promise last night by signing an executive order to impose 25% tariffs on Auto imports and while risk was lower on the headline that he would make an announcement at 4pm, the reaction to the news was very muted. When asked, he said the tariffs were permanent, while also mentioning Pharma and Chips and said the Auto tariffs would start on 3rd...

AccuTrade2000

A dial up in tariff rhetoric, briefly taking EURCHF below the 0.9500/20 support zone. A small recovery this morning though, and perhaps the market is struggling to believe Trump given the continued flip/flop on tariffs and lack of clear plan. Last night was aggressive, with blanket tariffs on autos but the EU also expecting 20% tariffs (my base case was 10%). Thus...

AccuTrade2000

Trump announced 25% tariffs on auto imports overnight and warned Europe of further tariffs should they work with Canada against the US which once again further highlights the tensions between US-CA at the moment. Whilist the market is largely ignoring the tariffs this morning I do think that is because of the more positive sentiment around Europe right now and...

AccuTrade2000

USDJPY chopping around on the 150 handle here in directionless trading, feels like we are coiling for a strong test of the well defined resistance levels above but in fairness we are not seeing much instruction from US fixed income or stocks even on the announcement of broad 25% auto tariffs. Japan is quite high up on the pain list for US auto tariff here and the...

AccuTrade2000

The next installment of the tariff saga has landed with 25% on the autos sector, this sounds like it will be on top of everything else that has been announced and will be announced come next week but the market seems pretty gun shy in reacting given post inauguration PnL destruction while trying to grapple with what was expected and whether or not the hype of...

AccuTrade2000

In a similar fashion to last week the screening of relative equity performance points to broad based USD demand. US equites (in USD terms) have underperformed all ROW equities we screen. The stand out pair is USDNOK. The combination of strong relative outperformance of the OBX and very strong seasonality on trade date month end off a interesting trading...

AccuTrade2000

Global equity markets were somewhat mixed in March. In FX, the USD weakened quite broadly in the month. Overall, the moves in equity markets, when adjusted for market capitalisation and FX performance this month, suggest that month-end portfolio-rebalancing flows are likely to be mild USD buying across the board, with the strongest buy signal in the case of the...

AccuTrade2000

The NZD enjoyed some buying interest last week, predominantly driven by IMM flows. Our FX flow data points at banks and hedge funds inflows, as well as corporates and real money investors outflows. NZD/USD’s fair value rose from 0.5850 to 0.5870 due to rises in the NZ- US short-term rates spread, global equities & the outperformance of US equities by Asian...

AccuTrade2000

The AUD experienced new selling interest last week, predominantly driven by IMM flows. Our FX flow data points at banks, corporates, hedge funds and real money investors inflows. AUD/USD’s fair value rose from 0.6376 to 0.6429 due to rises in the Australian-US rates & box yield spreads. AUD/USD is more than 1.5 standard deviations undervalued. The model has...