FX: What to watch out for in the week ahead – TDS
|Analysts at TD Securities draw attention to key developments on the trade front that will remain the market driver across the fx board this week.
Key Quotes:
“FX: Focus remains fixated on US-China relations though we view the confirmation that a delay in auto tariffs with Europe and Japan, alongside a settlement to lift steel/aluminum tariffs in Canada/Mexico as a welcome development. It may also signal that the US is preparing to harden its stance vs. China for the long. As a result, we remain bearish AUD, though election results may moderate that, and still see dips towards 1.34 in USDCAD supported. We retain a defensive stance on cross/JPY as markets may not appreciate prolonged trade friction.
US Rates: Markets will remain focused on trade headlines, but will also look to FOMC minutes on Wednesday and a number of Fed speakers throughout the week for direction. We expect investors to remain skittish as trade concerns linger, keeping rates at the lower end of the recent range.”
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