NY Open – All about rates
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Moves in rates weighed on risk sentiment overnight, keeping the broad FX complex and equities in the red. Hot AUD CPI saw a sharp rally in Aussie yields, markets now pricing 3bps of hikes. AUD briefly rallied though failed to sustain gains, as further data is required to assess whether the RBA should hike – our base case remains no hikes this year. German state-level CPI slightly missed, we expect a 2.4% YoY HICP print if trends repeat at a national level (08:00 EDT). US yields remain at elevated levels – 10y yields hold above 4.56%. Just Fedspeak and the Fed beige book (14:00) on the cards, neither will provide strong conviction ahead of core PCE on Friday. Elsewhere, South Africa heads to the polls today – stations close at 14:00 EDT and counting starts shortly after. Our base case is a ~45% ANC outcome (priced in by markets). MXN is the only outperformer intraday, we like being long MXN into elections this weekend. Banxico releases their inflation report at 14:30. The S&P raised India’s credit outlook to positive from stable, largely expected by local markets. |
COP – COP is the top performer in the Latam region this session having gained 0.72% against the USD. In terms of flows, our traders have seen COP inflows from FM clients and outflows from RMs. He also mentioned the move in COP today was driven by people fading some of Friday’s underperformance after president Petro’s comments threatening to cease payments on debt.