📝 Hedge Funds And Real Money Sold EUR Crosses Today: UBS Strategy

There has been a sharp move in EUR since the London open. The desk has sold good sized EURUSD and EUR crosses for both hedge funds and real money names.

There is no clear driver in terms of fresh newsflow, but there is some concern around the peripheral backstop after r from Bundesbank President Joachim Nadel on Monday.

Despite being a hawk, he does not seem to be pushing for a 5Obp hike on July 21 and sounds okay with exiting negative rates only in September. However Bund/I3TP spreads are not reacting and this seems an isolated FX move for now.

EURUSD is approaching the crucial 1.0340-50 support level, going back to late 2016/early 2017 again. Momentum is tilted to the downside despite what feels like market positioning that is already short. -UBS Strategy