1) It is end of the month and while we have seen 0 flows it is possible that some position squaring could still happen. (Just closed out AUDUSD longs for basically break even and trimmed half of USDJPY in front of CE data for example). Other traders will be also reducing risk into this data and due to month end also. Have to watch the fixes in Fx land.
2 ) US PCE has been on a strong downward trajectory and there is nothing that suggests that will change (that we have seen) but this data can be volatile from month to month... if there is one bad print that also wouldn't really change the trajectory here.
3) After we joked about more alcohol for China's consumers (via cheaper prices less war, less tariffs) we also saw minutes later nuclear talks will be revived between the US and China. I'm not the biggest China expert but this does seem to be a softening in relations....I'm expecting more news like this not less and that is not priced in.
Comments