Chart of the Day

The CFTC Commitment of Traders report showed that traders have once again increased their aggregate short position against the USD. Normally, the better growth prospects in the US this year would result in more bets in the USD’s favor, which appeared to be where the trend was heading a few weeks ago. Instead, the shift back toward shorting the USD may be a sign that the US’s better growth prospects are now fully priced in, or that traders generally believe the Fed’s commitment to keep rates very low despite the strong growth outlook.

Macro

Personal income growth rose to be 32% higher in YoY terms in March, thanks to the further stimulus payments. Overall consumption was 11% higher.

In Canada, GDP rose by 0.4% MoM in February, which took growth to -2.2% YoY. The leading indicator suggests growth should do very well later this year.

The first estimate showed eurozone GDP fell by 0.7% QoQ in Q1. The economic sentiment indicator has recovered since then though.

Eurozone inflation rose to 1.6% in April, while core inflation fell to 0.8%.

In Mexico, GDP rose by 3.3% QoQ in Q4, although that still resulted in growth of -5.3% YoY. The leading indicator there remains much weaker than in advanced economies.

Markets

The increase in short USD positioning was partly because non-commercial traders increased their net long position in the GBP last week - that went in the opposite direction of the GBP itself, which fell slighty last week.

The USD has been having a mixed performance against the two normal safe-havens. It has risen again the JPY, but weakened against the CHF.

Most equity markets performed poorly last week, with the exception of the Spanish Ibex.

Within the S&P 500, the cyclical sectors generally did ok, whereas it was a bad week for tech.

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