Citi says the prospect of positive COVID-19 vaccine news is likely still underpriced by markets – here’s the FX trade
Read full post at forexlive.com
A client note from Citi saying that the market is likely underpricng positive coronavirus vaccine prospects.
Trade is to buy a basket of:
- Canadian dollar
- Mexican peso
- Norwegian krone
Funded by (ie sell):
- yen
- Swiss franc
- USD
Citi note that this “vaccine optimism” trade is closely related to ‘risk-on’ trades. As for timing, the analysts are wary – it may be too early due to:
- near-term investor focus on the US election
- the risk of second waves
What to watch for timing is:
- Preliminary Phase III results as soon as next month should provide better opportunity for entry