- Citi model notes a strong signal
We’re in the countdown to month and quarter end at the moment and that means flows trump economic fundamentals in terms of price action.
This month, Citi’s preliminary month-end flow model suggests a stronger USD buying signal than the historical average.
They note that although US equity and bond markets weren’t the worst performers globally, they note that because of the prominence of US assets in global portfolios and foreigner hedging, it will mean net USD buying.
The overall USD-buying signal is at about 1.7 standard deviations against the historical benchmark. For EUR/USD it’s 1.3 standard deviations. So far they haven’t seen much in the way of real money selling G10 currencies aside from GBP and AUD.
