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6 Feb 2015
With Fed rate hike uncertainty rising strategic FX trade is the first choice – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale, prefers to be a strategic bear in CAD, GBP and AUD, as the Fed rate hike uncertainty rises.
Key Quotes
“Today, rate sentiment will be determined by the US labour market report. Our folk in NEW York look for a 275k gain and 0.4 on hourly wages, which would make a dent into the current mood in rates, as well as sending the dollar higher. We will see...”
“What's clear is the market sentiment on the Fed has shifted (in favour of never hiking) yet remains very split. So we will get a reaction to the data one way or the other. And it seems to me, it is preferable to have fx positions, at least, that thrive at these rates and also if the Fed hikes.”
“So, I don't want to be short yen or euros, where rates can't fall, but remain happy to be a strategic bear of CAD (oil), GBP (politics), AUD (China).”
“In EM, longs (in FX or asset) are NOT advised where central bank credibility is weakest.“
“Of course, very strong data would mean the dollar did well pretty much across the board and we wouldn't have to over-think, but it still pays to figure out who will be playing currency wars in the event the Fed goes into hibernation.”
Key Quotes
“Today, rate sentiment will be determined by the US labour market report. Our folk in NEW York look for a 275k gain and 0.4 on hourly wages, which would make a dent into the current mood in rates, as well as sending the dollar higher. We will see...”
“What's clear is the market sentiment on the Fed has shifted (in favour of never hiking) yet remains very split. So we will get a reaction to the data one way or the other. And it seems to me, it is preferable to have fx positions, at least, that thrive at these rates and also if the Fed hikes.”
“So, I don't want to be short yen or euros, where rates can't fall, but remain happy to be a strategic bear of CAD (oil), GBP (politics), AUD (China).”
“In EM, longs (in FX or asset) are NOT advised where central bank credibility is weakest.“
“Of course, very strong data would mean the dollar did well pretty much across the board and we wouldn't have to over-think, but it still pays to figure out who will be playing currency wars in the event the Fed goes into hibernation.”