24 Jan 2014
Flash: The first solid trend of 2014 is... - JP Morgan
FXstreet.com (Bali) - The first trend of 2014 has emerged by going long USD vs Asia, notes the Global Emerging Markets Research Team at JP Morgan.
Key Quotes
"After the first two weeks of the new year provided us with a range trading environment, we now think that a trend of bearish ADXY will kick off. We see five reasons for weaker Asian FX in 1Q:"
i) No inflows in local market funds yet: In our conversations with customers, there are no inflows reported in the local markets asset class year-todate
ii) Key Latin and EMEA currencies have weakened YTD, whereas Asia has not weakened as much: EM Asian currencies appear to lag versus key currencies in Latam and EMEA
iii) Payroll report was entirely faded by the street
iv) USD/JPY is threatening to break to new highs
v)Worries over China’s tight liquidity stance generates downside risks to growth
Key Quotes
"After the first two weeks of the new year provided us with a range trading environment, we now think that a trend of bearish ADXY will kick off. We see five reasons for weaker Asian FX in 1Q:"
i) No inflows in local market funds yet: In our conversations with customers, there are no inflows reported in the local markets asset class year-todate
ii) Key Latin and EMEA currencies have weakened YTD, whereas Asia has not weakened as much: EM Asian currencies appear to lag versus key currencies in Latam and EMEA
iii) Payroll report was entirely faded by the street
iv) USD/JPY is threatening to break to new highs
v)Worries over China’s tight liquidity stance generates downside risks to growth