Morning Call: Commodity net-long hits three-year low
Head of Editorial Content, Saxo Bank
Summary: Today's edition of the Saxo Morning Call sees our team review Friday's nonfarm payrolls release as well as the latest US Commitment of Traders report, which show commodities positioning among money managers at a three-year low.
Macro Dragon: Its about the BoE, not the ECB... Plus Trump vs. Macron Tues Could Spell Risk-Off
Macro Dragon = Daily Cross-Asset Global Views
We kick off WK # 4 with a Macro Dragon that looks at all the Major Central banks that will be meeting over the next two weeks including: BoJ, BoC, ECB, Fed & BoE - in addition to KVP's views we also link to the most recent statements. BoE is the most interesting given its recent tilt to the dovish-side & currently c. 70% prob of an insurance cut next Thu 30 Jan. This potentially creates some headwinds against sterling crosses & tailwinds for those tactically short sterling going into next wk. Biggest current market risk would be Trump / Macron (Tue?) fall-out on digital tax of US tech.
FX Breakout Monitor: USD poking at breakout levels amidst record calm
Record low volatility and a recent past littered with failed directional momentum trades are not inspiring confidence for breakout prospects, but the US dollar is poking at important upside break levels in places if it continues higher from here after starting with a recent break higher in USDJPY.
FX Update: Low beta blues, sterling churning
The ongoing melt-up in risk appetite continues to see little feed-through into the developed market currencies traditionally positively correlated with risky assets. Elsewhere, not even the impressive strength in the Chinese renminbi is driving consistent pattern in China-exposed emerging market currencies.
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