Dear Client,
Below is this week’s market forecast from our trade desk here at LTI.
Not a lot on our list for new additions to our FX positioning. However, a common theme in the FX market as of recent is the strong US data surprise, coupled with Hawkish Fed speeches continues to drive markets to reassess the FED’s terminal rate, and therefore push back its pricing of cuts. We see the USD remaining supported in the near term as investors readjust positions and continue to de-risk positions. As of now, the market feels as if its waiting for data releases such as ISM manufacturing (Wednesday) and NFP (10/03). We remain monitoring US spot curve inversion (a typical indicator of over tightening and recession worries).
The JPY remains at the top of our list for hedges against USD weakness. While we’d like to see renewed weakness in CAD this week.
We wish you all a great week in and out of the markets.
Regards