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Citi month-End FX Hedge Rebalancing: April....>

FOREX
FOREX: Citi month-End FX Hedge Rebalancing: April 2019 Final Estimate
- The month-end FX hedge rebalancing model suggests moderate selling of USD on
Tuesday, 30th April. The signal this month is relatively strong measuring above
0.5 standard deviations for all currencies.
- The relentless march of global equities continued in April with the MSCI US
equity market approaching all-time highs. Developed market stock indices were a
sea of green in April while fixed income markets endured a much more muted
month. Most local currency bond indices ended the month slightly down. The UK
was the exception here with bond markets falling 1.4% due to Brexit gyrations.
- The USDJPY sell signal is weakest due to the assumption of lower foreign
equity hedge ratios amongst Japanese investors. Overall, the signal does suggest
USD weakness into the month end fix. Event risk around the fix comes in the form
of US pending home sales, German CPI and Canadian GDP.

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