💵 *JP Morgan: overview of real x dollar - 05/03*

It was just a brief relief. The day started with the BRL under pressure as the USD strengthened again. After a short relief in the morning, the session became unusual: the fixing showed decent USD sales and there were outflows in the outright market, but the spot market continued to record solid demand for USD.

At the same time, the basis curve (currency coupon) opened significantly across all maturities. We observed some accounts reducing their long exposure in BRL, and we also materially reduced our short positions in USD. For now, we prefer to remain tactical and return to act as soon as the current turbulence subsides.

In terms of flow, outflows predominated. Systematic and discretionary hedge funds were the main buyers of USD, while Real Money accounts were the main sellers of USD, alongside us, on the day.

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