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Credit Suisse FX Team Sees Clients Most Bullish On AUD/EUR, Most Bearish On USD
The latest survey conducted by Credit Suisse's FX Sales team confirms our conclusion from reading yesterday's bearish report on the USD from Goldman, namely that the time to buy the dollar is here. Per CS: "Our clients’ most bullish currency views seem to be AUD, EUR and CAD. For the first time since December 2009, our sales force thinks clients have turned net bullish on the euro. Our clients’ top bearish currency views seem to be the USD and NZD. In terms of client flow, our sales team witnessed net buying of EUR and AUD, and net selling of USD and MXN over the past two weeks." We are confident today's CFTC COT report will confirm the recent collapse in speculative EUR bias, indicating that it may well be time to go long the EURUSD, if only for the contrarian play, now that everyone is once again on the other side of the trade, presumably based on the silliest of catalysts, the "stress test" circus.
More from CS:
Our clients’ most bullish currency views seem to be AUD, EUR and CAD. For the first time since December 2009, our sales force thinks clients have turned net bullish on the euro. Although the euro has regained yield support following the expiry of the first 12m LTRO on July 1, we expect the euro to lose ground again vs. the USD and most other G10 currencies in the months ahead (see “FX Strategist – Implications of a smaller EUR”, published 28 June 2010). We are also bullish on the AUD and CAD. The much stronger-than-expected employment reports released in Australia and Canada early this week support our and our clients’ view on this.
Our clients’ top bearish currency views seem to be the USD and NZD (Exhibit 9). We are more neutral on the USD in the near term. Although the USD is likely to remain broadly well supported vs. the EUR and the JPY, we think it would underperform the peripheral currencies, such as AUD and CAD should the risk sell-off subside. We are bullish on the NZD vs. the G3, but see interest rate spread pressure on AUDNZD to rally.
Split views on GBP and JPY. We notice that GBP and JPY are listed by clients as the third and fourth most bullish as well as most bearish currencies In terms of client flow, our sales team witnessed net buying of EUR and AUD, and net selling of the USD and MXN over the past two weeks.
Based on the results from our last survey, an equally weighted basket of long clients’ top bullish currencies (CHF, AUD and GBP) and short clients’ top bearish currencies (EUR, USD and NZD) would have yielded a spot return of 1.61% over the past fortnight. This strategy would have yielded total spot returns of 5.27% year-to-date.
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Contrary opinion, particularly with GS, may not be right.
Big4 still short USD, although P&F still targeting 115...
Aiiigh! The DXY has a H&S top pattern, so I agree with GS on this?! Crap, I jutht bit my thtongue...
The DXY chart looks like it's ready to continue higher with indicators oversold & starting to turn up again.
Indicators schmindicators. Where are your great so-called 'indicators' now?
'Nough said. Capitulation accepted.
Regards
Errm, yes, wasn't the time to recommend going long EURUSD at 1.22, not now?
DavidC
Good point Dave. Which is why I called it days ago; it may still have some more downside in it yet, though.
Unless GS is becoming the best contrarian indicator around these days, of course.
Regards
Errrm, yes; see above. And it's only Tuesday.
See #460936 above.
Rinse and repeat.
Still on. Anyone following this thread? You wished you had. You missed the gravy, but there is likely still plenty of gristle to chew.
Regards
DXY around 76 and change...
@ David C
"...are we learning yet?"
Regards
More rally next week ?
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