Citi sees 'material risk' of a higher USD in May.
Strategists at the bank are citing a turnaround of two key themes that have driven risk rallies in past months. The positives were:
- rebounding China
- dovish Fed
But these are now being questioned, and so increases the chance of a higher USD.
Specifically they cite Powell's press conference, where the Chair surprised with a less dovish take to lower the chance of a rate cut ahead, while China data for April has so far missed.
Citi like EUR/USD shorts … and say they expect volatility will increase in May.
Putting the Pow back into Powell at the presser.
