USDCOP Close/ Flows
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USDCOP traded higher today (+0.83%) catching up after yesterday’s holiday but outperforming peers. We saw RHS flows from hedge funds and real money accounts (but overall less flow). On the other hand, corporates were mixed in large sizes. Forward points traded steeper with short end basis (1×2 and 1×3) close to 0 while the long end (1 year) traded higher. We have not seen interest to sell long end points yet and I believe there is still room for the 1 year area to trade higher. |
NY Open – Peaking prices
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Disinflationary signals from UK and NZ CPI data led to losses overnight in FX, with FI outperforming. NZ non-tradeables CPI drops to 2021 lows, supporting larger 75bps cuts for Nov. An undershoot in UK services CPI to BoE forecasts is the final green light for a 25bps cut for Nov. Risks of consecutive cuts increase, though we need budget risks to clear. JPY markets overlooked comments from BoJ Adachi, who skewed slightly more hawkish. European equities continue to slide as earnings disappoint, which slid into Asia overnight. US bank earnings continue today. US markets will likely drift given no scheduled data catalysts. US election focus is ramping up, VP Harris will be interviewed by Fox News at 18:00 EDT today. In EM, Brazil planning and budget minister Tebet said that the government will unveil many spending cut measures this year, though fell short of providing any targets. COP watches CB economist survey data. Three Asia rate decisions overnight – THB was the most surprising, with the BoT cutting by 25bps. IDR and PHP were broadly unch. with in line decisions (hold, hawkish 25bps cut respectively). |