The report analyzes the consolidation of the USD ahead of the US CPI report and highlights a potential policy shift in Japan to incentivize domestic asset investment. It also introduces a new short USD/BRL trade recommendation.
Key Takeaways
- 1.USD consolidating near highs, awaiting US CPI data and Fed Chair Warsh's testimony.
- 2.Finance Minister Katayama signals potential policy shift to encourage Japanese household and pension fund investment in domestic assets.
- 3.New short USD/BRL trade recommendation based on favorable carry trade conditions.
Table of Contents
- USD is consolidating ahead of US CPI report
- JPY: A significant policy turning point favouring home bias?
- USD/CAD: Policy divergence & trade uncertainty remain key drivers
- Weekly Calendar
- New Trade Ideas
- FX Portfolio
- FX Positioning
- JPY Flows – High Frequency
- FX Correlation Heatmaps
- AI Demand vs Energy Inflation
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Authors
Derek HalpennyLee HardmanAbdul-Ahad Lockhart
Securities
USD/BRLUS 10-Year Treasury
Themes
AI vs Energy InflationJapanese Policy Shift
Regions
GlobalAsia PacificUnited StatesJapanBrazil