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"STRONG" DOLLAR BUYING SIGNALLED FOR MONTH-END - BARCLAYS Analysts at Barclays say their passive month-end rebalancing model indicates a "strong dollar buying signal" against major peers by month-end, although with dollar positions crowded, the signal may be dampened.
It's the first dollar-buying signal at month-end since November, Barclays says, driven primarily by the end of the global equity rally amid heightened geopolitical risks and elevated commodity prices.
"Despite the global spillovers, the sell-off in the US equity market still dominated hedging flows because of its large market cap," Barclays writes.
"This has induced our model to produce a strong dollar buying signal across all majors in April."
The dollar has been strong this month, touching a 5-1/2 month peak last week as persistent inflation has forced the Fed to push back on expectations for policy easing.
Those expectations have led to crowded U.S dollar positioning on the long side, according to Barclays, which could weaken the signal from the model.
"We caveat that this may dampen the strong buying signal for the dollar at month-end," they write.
(Samuel Indyk)
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FOR WEDNESDAY'S OTHER LIVE MARKET POSTS:
GOLD RUSH CLICK HERE SHARE BUYBACKS, THANK YOU! CLICK HERE BOJ INTERVENTION WARNINGS? NOT LOOKING CREDIBLE CLICK HERE BIG EARNINGS SWINGS CLICK HERE EUROPE EYES HIGHER START AS EARNINGS KICK INTO HIGH GEAR CLICK HERE YEN ON THE BRINK, BUT TESLA PULLS BACK CLICK HERE
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