EM CEEMEA CREDIT: PEOPW: DIVIDEND AT 18.36 ZLOTY/SHAR

UBS’ model notes that “CTAs have continued to reduce their equity exposure, bringing their overall selling to ~$100bln in just four weeks. Their equity beta is still positive, but below its 30+-year average. Going forward, we don't expect CTAs to turn aggressive buyers, unless price action becomes supportive. We still see scenarios where CTAs will remain sellers in the near term”.

• “In bonds, CTAs are pausing. They remain short overall, mostly because of underweights in Europe, UK & Japan (they are neutral U.S.). Rising bond volatilities should trigger some deleveraging, leading to some short cover over the next few weeks”.
• “CTAs have cut 50% of their long position in Credit spreads (~$10/15m DV01) since our last update. We expect the flow to remain negative, potentially selling another $5/7m DC01 over the next 2 weeks. If realised, that would make them neutral U.S. CDX IG & HY, neutral EM CDX, and long EUR Itraxx Main & Xover (at 40% max exposure)”.
• “In FX, CTAs are back to neutral USD, unwinding the post-election trade. The consensus long TRY position took a severe hit last week, and CTAs are on their way to reducing risk there”.
• “CTAs have increased, and currently hold a massive relative value position in commodities: long metals (precious & industrials) vs. short energy & agriculturals. Some profit taking might be in order over the next few weeks”.

• Currency markets are mixed early Tuesday, with a small part of the recent JPY dip partially reversing and the USD Index broadly unchanged. This keeps tariff risk front and centre, as markets continue to look to gauge the extent to which the White House could narrow the scope of 'Liberation Day' tariffs next week.
• Scandi currencies remain firm and among the best performers YTD, with USD/SEK still well within reach of the 10.00 handle as European equities continue to gather poise and Germany's DAX builds a base to target the yearly highs.
• AUD recovered off early European lows, having underperformed alongside NZD for much of the session. The pre-election budget unveiled by the Labor government disclosed an income tax cut in both the next two fiscal years, and a minimally wider budget deficit. AUD/USD remains anchored to the 50-dma in the short-term, but AUD/NZD continues its recovery off lows: 1.1011 is the next major upside level.
• US new home sales and March consumer confidence data are the calendar highlights, with appearances from Fed's Kugler & Williams, ECB's Holzmann, Vujcic & Nagel. 

Of note:

EURUSD 1.89bn at 1.0800 (thu).

EURUSD 2.21bn at 1.0800 (fri).

USDJPY 1.2bn at 151.00 (fri).

USDCNY ~1bn at 7.2800 (mon).

• EURUSD: 1.0750 (400mln), 1.0850 (832mln).
• AUDUSD: 0.6265 (470mln), 0.6300 (429mln).
• NZDUSD: 0.5740 (283mln).
• USDCNY: 7.3000 (418mln).