The G-10 rundown
USD – the US dollar is limping here – only the very weak JPY keeping the broader USD measures from suggesting strong risks of a turn lower – stay tuned for the weekly close today for deepening signs of a USD turn to the downside.
EUR – the ECB minutes yesterday offering further support for the sense that the ECB is at odds over policy and is effectively at the end of the policy road for now -
JPY – the JPY lower on the chunky sell-off in bonds. If risk appetite is set for a major revival and yields to head higher, the enthusiasm for carry trading yen versus EM and elsewhere likely to return.
GBP – a huge boost to sterling from the apparent breakthrough between Johnson and Varadkar, but has Johnson sold the Northern Irish unionists down the river and what exactly is his new position – looking for further headlines today from the EU’s Barnier. Plenty of room for a one-off adjustment higher in GBP if we are suddenly headed to a deal – but caution on the longer term.
CHF – Brexit relief and higher bond yields helping the CHF sharply lower, but more robust sign of a major turn if EURCHF is able to blast through 1.1000.
AUD – the USD-China trade deal hopes, even if the deal proves very narrow, helping to boost AUDUSD through local resistance – plenty more upside likely to come if equity markets celebrate whatever outcome awaits us.
CAD – the latest Canadian employment data up today – if we are headed to US-China trade détente and a surge in risk appetite, CAD could underperform in the crosses, even if USDCAD turns back lower.
NZD – AUD getting the better over NZD on the US-China trade deal hopes – key risk for NZD crosses next week on the Q3 NZ CPI release next Wednesday.
SEK – the Swedish krona launching a considerable reversal here – tempting to call a turning of the corner in both EURSEK and USDSEK – but we need another percent of upside to call a turn (into 10.70 or lower for EURSEK and 9.60 or so in USDSEK as noted above).
NOK – the consolidation in NOK gentler than in SEK yesterday – risk appetite a key driver for whether a lid stays on EURNOK.
Upcoming Economic Calendar Highlights (all times GMT)
- 1230 – Canada Sep. Employment Data
- 1400 – US Oct. Flash University of Michigan Sentiment
- 1715 – US Fed’s Rosengren (Voter) to Speak