Citigroup ETNs linked to ... (DCHF)

EUR/CHF has been rising since July, as sentiment has generally improved. CHF strength remains high in spite of recent relative weakness, indicating the potential for sustained weakness.

We construct an FX Strength Aversion Index to rank which G10 countries cannot tolerate the macro costs of a strong currency right now.

The US employment report is front and center. The euro recovered smartly yesterday, making new highs late in the North American session, even as equities were hammered.

The US dollar is continuing to recover after hitting new lows earlier in the week. It's lower against all the major currencies and most of the emerging markets.

Risk-on continues with stocks trading at record highs mainly driven by the momentum in the mega-cap growth stocks; S&P 500 is trading above 3,500.

Markets are searching for direction at month-end. The dollar is mostly higher, though the Norwegian krone and Canadian dollar are resisting the tug.

Powell is the center of attention. The market will be looking for hints (confirmation) that the Fed is preparing to formally adopt an average inflation target.

The MSCI Asia Pacific Index had reached seven-month highs on Tuesday, but Japan, China, and Australian stocks saw modest profit-taking today.

AUD/CHF has been trading in a steady fashion recently, in spite of U.S. equities rallying.

After a week of consolidation, we think EUR/USD could go back to test the highs. EUR/CHF remains trapped in tight summer ranges and we see no reason for a break-out.