Barclays notes that markets had “reacted to slightly softer US data in May, as seen in outsized moves to PPI, CPI, and retail sales, with bonds rallying and stocks reaching new highs”. As such, “this will likely trigger more rebalancing needs to sell dollars at month-end”. Adding that “although the broad rally extended to other G10s, the large market cap in US equity markets has dominated hedging flows” on the month. Taking that into consideration, their model “suggests this the dollar-selling signal is consistent across G10s”.
(h/t @ Reuters)
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