Morgan Stanley went short USD/CHF at...>

DOLLAR-SWISS: Morgan Stanley went short USD/CHF at the NY close on Thursday with

a target of CHF0.9200 and a stop at CHF1.0100.

- MS suggest that "CHF looks oversold. Investors appear to have reacted to news

re: a Swiss bank's change in currency denomination of its operational

risk-weighted assets by selling CHF in recent days, but the flows are highly

unlikely to be large enough to justify a lower CHF valuation. As a result, we

like fading CHF weakness. In addition, Brexit uncertainty may support the CHF.

In the US, weak personal spending data have now been followed by large -ve

surprises in the ISM non-m'fing & m'fing surveys, suggesting that the labor mkt

(& by extension, US consumer demand) may start to weaken. We are watching the

NFP report for confirmation for our exp. that broadly declining sentiment may

start to affect hiring. Once the US labor mkt & US consumer demand start to

decline (as we exp.), FOMC cuts (& narrower interest rate differentials/a weaker

USD) are likely to follow. Key risks to this trade include that the Fed signals

that it needs more confirmation of hard data weakness before cutting rates or

that the SNB intervenes proactively to weaken CHF."