By eFXdata — Jul 28 - 10:45 AM
Societe Generale Research likes short EUR/JPY in the near-term.
"The FOMC hiked rates by 75bp and expects to continue tightening at upcoming meetings. Forward guidance may now be out of fashion in general, which is a good thing...There’s plenty of news to come in the weeks before the next FOMC meeting (2 CPI prints and 2 jobs numbers, for starters), and it’s worth remembering that the DXY peak came 20 minutes after the last CPI print, but August volatility notwithstanding, it is beginning to look as though the dollar has peaked against most currencies, with the glaring exception of the euro," SocGen notes.
"The fact that such a modest shift in the FOMC’s tone was enough to send equities and commodity prices higher, is a bit worrying, however. Oil, copper, and the rest reflect fading fears of a hard landing, but between China’s housing crisis, Europe’s energy crisis, and global inflation, there will be plenty of opportunities for sentiment to move around this summer. ‘Be nimble’ isn’t terribly useful advice, but is apt. Maybe, be short EUR/JPY is a more useful conclusion," SocGen adds.
Société Générale Research/Market Commentary