From the FXWW Chatroom: CitiFX Global Flows also continued to support a “risk on” view of markets, but we are concerned some of the optimism may be overdone.
• Hedge funds doubled down on pro-risk trades last week, selling USD aggressively and buying EM FX (all regions) and most commodity FX (AUD, CAD, NOK). Real Money funds were more cautious – selling EUR & USD while buying JPY, GBP, CEEMEA and LatAm FX. Citi’s EM risk flow indicator has now reached its highest since June 2014, hence the consensus on this optimism holds concerns for us. So far – Citi’s data has not recorded evidence of a reversal.
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