- Investors diversify into safe haven assets as global equity rout continues, Chinese Yuan devaluation and falling commodity prices
- Recent USD strength came from risk-off sentiment
- A strong USD hampered the likelihood of an early Q1 rate hike from the Federal Reserve
- We have seen some of this excess – giving strength to the Euro and Yen trade
- Bernanke says USD rally may have already peaked – Forexlive.com
- Our view is that the currency market may soon look at stabilizing the excess safe haven demand in the dollar
- Our biased also confluence with the fact that positive commodity seasonality may see a pullback in the US dollar and offer a short term bounce relief on other currencies
- Chinese economy is initiating a new phase of “Severe Re balancing” after enjoying many years of economic growth
- Chinese central banks laying out plans to increase RRR deposits placed in Yuan clearing banks
- Chinese economic data is out of the way but all eyes are on UK, Europe and US CPI numbers
- ECB 2016 press conference may shed more lights – there were murmur among the camp for additional stimulus in March 2016
CurrenciesÂ
Dollar Index – Anticipate weakness in the next few days / weeks
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USD/JPY
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GBP/USD – A rebound in store for sterling? Quiet possible as it confluence with positive seasonality
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NZD/USD
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EquitiesÂ
Stoxx
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CAC
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SPX – The onslaught lower may or may not be over yet as the EW count remain unclear / Unless we break above 1960 then we cannot rule out lower
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CommoditiesÂ
US Oil – Short covering rally is possible here
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Copper – The ascending wedge is positioning price action to make a critical direction soon
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Platinum – Sellers remain in control but we cannot rule out short covering rally could be at works if China manage to stabilize
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