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Market participation is unsurprisingly muted and lacks conviction overnight, as we head into US CPI/FOMC dual risks. NOK leads slight gains in G10FX, though the rest of the complex is broadly flat, alongside USTs and equities. Overnight, the EU announced additional tariffs on Chinese EV’s on a per-firm basis, China PPI and CPI came broadly in-line. French President Macron rules out resignation regardless of snap elections. In the UK, GDP prints flat, while ECB speakers remain cautious on rate cuts. Guindos speaks at 09:00 EDT. US CPI prints first at 08:30 EDT ahead of FOMC (14:00). Our economists see downside risks to their 0.26% unrounded core print. Data surprises could see FOMC members revise their 2024 median “dots” – our base case is a revision to two cuts vs three from March. Fed Chair Powell’s presser should still tilt dovish. Limited EM catalysts other than INR CPI at 08:00 EDT. Bearish political risks in MXN keeps it the worst performer intraday. THB saw a hawkish rate hold overnight. |
COP – USDCOP trading above dMA200 (3974) for first time since May 4, 2023. We have seen outflows from HFs, systematic, and RM clients during the day while corporate clients have been on the sidelines. The pair closed above the 200dMA, which our traders believe will leave USDCOP at a bad technical level for tomorrow’s US CPI print. Further, COP CPI prints tonight at 19:00 PM EDT where we are expecting 0.43% MoM vs 0.59% MoM previously. From here we watch the 4,000 level as liquidity gets thinner toward the end of this session.
