NY Open – Mixed bag
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Slight risk aversion in markets overnight, with high-beta FX underperforming, and equities mixed. JPY stood out, no trigger behind the outperformance though a break of psychological levels exacerbated moves. We don’t see any strong support for USDJPY until 155. EURUSD is extending losses after a break of 1.09. US equity futures are slightly soft, with heavyweight earnings after the close (TSLA), Europe watching LVMH (also aft-mkt). US election noise will continue, VP Kamala Harris said that she has “secured the broad support needed” to become the nominee. A selection could be confirmed by Aug 7, the DNC said. US existing home sales prints at 10:00 EDT, our economists expect a decline. In EM, HUF expecting a 25bps cut from NBH (08:00), TRY should see a hawkish hold (07:00). BRL expects FGV CPI data at 07:00 EDT. Overnight, India tightened their fiscal deficit to 4.9%/GDP, though a surprise increase in capital gains tax saw a knee-jerk reaction lower in Indian stocks. Moves have since recovered. |
COP – Today the market opened lower, and we saw COP buying throughout but limited flows overall so far today. The short end of the forward curve moved higher as we have been seeing USD inflows into the local market and also some COP scarcity in the local bank system. The move was mostly concentrated in the 1-month area while the long end of the curve remains unchanged. We have been seeing a higher interest from locals to reduce their USD balance, driving this spike in short end points which our trader Santiago thinks could last until August. We continue to see lower activity from local clients at the current level although Corp clients are better sellers of USD above 4,000.