USD: Near-term pullback could continue - BNPP
|Research Team at BNP Paribas remains quite constructive on the USD as we move into 2017, but, with US nominal and real yields well-off their December highs now and the market already long USD according to their metrics, they see some scope for a near-term pullback vs the core currencies, particularly if equity markets give back some ground.
Key Quotes
“The USD is losing ground, retracing some of its post-employment report gains vs the EUR and JPY. There was not obvious catalyst for the reversal, although the USD retreat did coincide with a weaker risk sentiment: a pullback in US yields, a 0.3% drop in the S&P 500 and a slide in front-month crude prices to new lows for the year.”
“Today, the US calendar will be quiet, with the NFIB small business sentiment survey and the JOLTS job openings reports the only releases of note. We expect the NFIB small business optimism index to continue to be buoyant, and we forecast a rise of 2.6 index points to 101.0.”
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