Oil Prices Steady as Middle East Crude Flows Recover 
Gold Prices Slip as High Treasury Yields Weigh on Bullion 
Wall Street Edges Higher as Treasury Yields Retreat 
Asian Stocks Rise as Bond Yields Ease Ahead of U.S. Inflation Data 
Bank of America Sees EUR/USD at 1.15 by Year-End 
Australia Trade Surplus Shrinks Sharply as Imports Surge 
Gold Prices Steady as Markets Await U.S. Jobs Data 
Scope Warns US Debt Could Hit 160% of GDP 
Nasdaq Futures Jump as Micron Earnings Boost AI Trade 
South Korea Exports Surge 83.5% on AI Chip Boom 
Yen Strengthens on Tokyo Inflation as Dollar Awaits US Jobs Data 
Asian Currencies Mixed as Yen Slides on BOJ Rate Signals 
US Treasury Bond Buybacks Fall Short Despite Expanded $6 Billion Cap 
India Manufacturing Growth Hits Seven-Month High in September 
Asian Stocks Fall as US Jobs Data and Oil Risks Rattle Markets 
Oil Prices Hold Steady as Middle East Supply Risks Persist 
Fed’s Hammack Says More Data Needed Before Next Rate Move 
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The recent weakness in the U.S. dollar is expected to be unwarranted, considering the gap that has opened up with relative interest rates. The U.S. dollar’s long positioning has moderated significantly and now stands at just +1 on our +/- 50 BNP Paribas Positioning scale, the lowest level since the US election, reported BNP Paribas in its research note.
Moreover, upbeat United States economic data and upside inflation expectations hinted that markets are under-pricing the Federal Reserve interest rate hikes for 2017 and 2018.
“We, therefore, think this is an opportune time to reload USD long exposure. We keep USD longs via options, against the JPY, EUR & CAD,” suggested BNP Paribas in its note.
The BNP Paribas Bank in its research note mentioned that the risk to the bullish U.S. dollar view likely surrounds the unpredictability of the new US President. It may take time for Trump and Congressional Republicans to agree on tax plans. Furthermore, consumers and businesses may be more optimistic, but are choosing to wait to see how policy plays out before committing actual money.
Lastly, the BNP Paribas Bank concluded that it believe these risks are balanced by the light USD positioning, strong economic fundamentals and near-term USD undervaluation.
