Asia open: dollar trades ona weak note still - TDS
|Analysts at TD Securities explained that market sentiment was broadly upbeat with equities posting outsized gains (SPX: 2.4%, TSX: 1.0%) for a partial recovery from last week's selloff.
Key Quotes:
"There was no clear catalyst for the move and rates were little changed in both countries despite another attack on the Fed by President Trump."
"The USD continues to trade on a weak note, with NZD (+0.5%) once again leading the G10 complex against the dollar after an upside surprise on CPI. CAD (+0.4%) saw modest gains for the fourth consecutive session while JPY (+0.5%) was the weakest performing G10 currency."
"An RBA speech is the main risk event for Wednesday amid a quiet session for data."
What we're watching in markets
"Risk sentiment came roaring back, seemingly on a string of positive earnings surprises. FX moves were more benign however."
"USD gains have been closely linked to relative equity performance this year, but recent volatility may have stifled convictions. Investors may need to wait for the mid-terms to provide more clarity on whether the #maga/USD theme has further to run."
"Still, with more questions than answers at this point, FX markets may look to the Fed Minutes for potential guidance. 112.50/80 in USD/JPY remains a notable resistance point. CAD's rally looks a touch excessive with so much optimism in the price; we continue to favor fading this through AUDCAD."
"Treasuries will look closely to the September FOMC minutes for direction, looking for any changes to the conversation on r* and the removal of "accommodative"."
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