U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
US Gas Market Poised for Supercycle: Bernstein Analysts 
Wall Street Analysts Weigh in on Latest NFP Data 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
S&P 500 Relies on Tech for Growth in Q4 2024, Says Barclays 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Stock Futures Dip as Investors Await Key Payrolls Data 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Urban studies: Doing research when every city is different 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
The market has been preparing for the binary option that will be expiring towards the end of this week as the December 15 tariffs are around the corner. It seems that a deal is hardly on the table, as both sides keep sending mixed signals. Larry Kudlow's interview last Friday sounded vague.
On one hand, he said that a deal was "close"; on the other hand, he said nothing was confirmed and more importantly he stated "we must be tough with China". Such rhetoric does not sound like a deal will be reached any time soon.
Hence, the question for this week has been narrowed down to: Will the tariffs would be delayed? Obviously, it is a hard call. However, given the currently low FX volatility globally, it is even harder to expect to see any big movement in USDCNY with or without a tariff delay.
We support that USDCNH could briefly touch below 7.00 mark if there is tariff delay, while if the tariffs would arrive as scheduled, USDCNH could spike towards 7.20 in the major uptrend (refer 1st chart). If this is the case, USDCNY will remain range-trading. Options markets are also bidding such upside risk possibilities.
Hence, at this juncture, we remain short in CNH on hedging grounds via 6-month (7.00/7.25) debit call spread. If the scenario outlined above unfolds, we will re-assess our stance but at the moment there are no changes to our CNH recommendations. The positively skewed IVs of 3m tenors indicate that the upside risks of USDCNH are foreseen, bids for OTM calls upto 7.20 levels substantiate the bullish risks (refer 2nd exhibit). Courtesy: Sentrix & Commerzbank
