A clash in month-end FX rebalancing signals this month – Deutsche

Deutsche says that their month-end FX model is hinting at conflicting signals from a relative equity performance versus a seasonal performance standpoint. The firm says that rebalancing flows on the back of relative equity performance suggests mild USD buying against the euro. However, seasonality points towards broad USD selling – in particular on month-end itself and the first trading day of February.

That being said, Deutsche is quick to point out that there are bigger factors in play in markets this week. The whole issue involving Nvidia, DeepSeek, and tech shares in general is something that stands out alongside key earnings releases. We’ll be getting Apple’s earnings later today of course after Meta, Microsoft, and Tesla yesterday.

The Fed was the other key factor but we’ve already gotten over that hump now. From earlier: What’s the takeaway from the Fed yesterday?

This article was written by Justin Low at www.forexlive.com.