Citi Wealth Insights

Gold: Breaks above $2,000/oz overnight to trade as high as 2,031, leaving Gold futures up ~13.5% in USD terms QTD and ~9.7% on average across the rest of G10 FX complex.

USD: Dollar rebounds on a short covering move that begun on Friday – the USD bid in the Asian session yesterday extends with intensity in the London and NY trading hours overnight with the broad based USD Index (DXY) rebounding from a low of sub 92.50 but stopping short of 94.00.

Citi analysts see weakening dynamics, with rate differentials, a potential mini reflationary macro environment and abundant liquidity working against the USD.

While commodities are recovering from the depths of the demand shocks that accompanied the rapid global spread of COVID-19 in 2Q, the road to full recovery is likely to remain bumpy.

Within global fixed income, Citi analysts are overweight US bonds such as Treasuries and Investment Grade debt, and USD Emerging Market Debt. Global High Yield remains neutral.

A narrow focus on performance may accumulate overweights in the most over-valued assets in time. Citi’s Global Investment Committee is overweight global equity, allocating more broadly across beaten down sectors to increase diversification.