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### POV: POOR PAYROLLS COULD MARK TOP FOR DXY....>

US
US: ### POV: POOR PAYROLLS COULD MARK TOP FOR DXY
-After a sublime 5.5% rally since mid-April, the USD is beginning to show signs
of fragility, with some major pairs pointing to a near-term turnaround. A poor
nonfarm payrolls reading today may provide the perfect catalyst for a
correction.
-MNI's PINCH model showed US rate hike expectations dragged lower by the Italian
political crisis, but this failed to make any material dent in the dollar.
Should today's BLS report cement lower rate path expectations, markets will be
given the perfect excuse to re-align the USD with rates.
-MNI's Technical Signal Monitor showed a near clean sweep of positive indicators
for the USD as recently as last week. This has now shifted in favour of EUR &
JPY, the two heaviest weighted currencies in the DXY, and against the USD,
flagging a market that is not as USD positive at it once was.
-RISK: Political fragility continues to bubble in Europe, with Spain taking the
spotlight as Rajoy looks certain to lose a confidence vote in parliament today.
Another populist shake-up in Southern Europe may relieve downward USD pressure.

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