PLN: We moved MW on euro area weakness. We recently stopped out of our bullish PLN position following disappointing euro area business surveys and further EURUSD downside but remained hedged using below options strategies.
Fundamentally, we remain constructive, believing the currency is now relatively weak compared to the resilient domestic data.
However, the scope for meaningful appreciation will remain limited until EURUSD turns higher, in our view.
CZK: Our favoured OW, holding short in USDCZK and EURCZK. We reckon that CZK remains the strongest reflation trade within CE4.
The bullish stances are driven by our expectation that CNB will surprise more hawkish and hike twice this year and by a strong basic balance of 2.6% of GDP.
The currency screens 5% cheap in our BEER model and 9% cheap in our FEER model. Data momentum is starting to turn, with downside surprises in inflation now mostly behind us. Courtesy: JPM
Derivatives Hedging Strategies:
On hedging grounds, we advocate initiating longs in USDPLN and USDCZK at-the-money -0.49 delta put options of 1m expiries with a view to arresting potential bearish risks (50:50 notional, at spot reference: 3.7199 and 22.1863 levels). Delta measures the change of an option's premium with respect to changes in the currency pair exchange rate. Another way to reckon of Delta is as if it's your outright spot exposure.
Currency Strength Index: FxWirePro's hourly USD spot index is flashing at -35 levels (which is bearish), while articulating (at 13:03 GMT).
http://www.fxwirepro.com/currencyindex.
FxWirePro launches Absolute Return Managed Program. For more details, visit:


Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic
Urban studies: Doing research when every city is different
BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan
Moldova Criticizes Russia Amid Transdniestria Energy Crisis
China's Refining Industry Faces Major Shakeup Amid Challenges
2025 Market Outlook: Key January Events to Watch
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated
China’s Growth Faces Structural Challenges Amid Doubts Over Data
Energy Sector Outlook 2025: AI's Role and Market Dynamics
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One
Bank of America Posts Strong Q4 2024 Results, Shares Rise
Markets React as Tensions Rise Between White House and Federal Reserve Over Interest Rate Pressure 



