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CitiFX Strategy Weekly
04.05.2012
G10 Focus – Ideas worth keeping
After 18 months of existence, our leveraged trade ideas portfolio has generated close to 19% return across 55 trade ideas. We are presently long scandi and commodity currencies, short sterling, and short volatility.
G10 Outlook – The better part of valor is discretion
Extremely tight ranges remain in place and investor conviction is increasingly weak. With few key data releases or policy events next week, it is not clear that a breakout is forthcoming. Thus, the more prudent tactical decision is to play the ranges rather than position for an immediate breakout.
Asia – Disinflation kicking in
CPIs generally surprised on the downward, suggesting broad-based disinflationary pressures. We favor receiving rates in the open, high-beta economies for the good risk-reward. We are largely neutral on AsiaFX, but like to sell the short-dated USD/CNY NDF.
CEEMEA — Focus on Hungary
Selling Hungarian short-dated CDS is attractive. Risk premiums are still substantial in Hungary. We continue to believe that a deal with the EU/IMF will eventually be struck although the exact dates remain unclear.
This is an excerpt of CitiFX Research & Commentary as received in full by CitiFX Pro clients. It is provided to you only as an example of information made available to CitiFX Pro clients, and it does not contain the full analysis, conclusions, or other information found in original document.