The G-10 rundown
USD – the greenback looking firm this morning – but broadly speaking neither here nor there. As noted above, watching the pivotal risk sentiment levels and for a breakdown in EURUSD and how USDJPY deals with a sell-off in equities, if one ever develops, for signs that the USD remains king of the mountain. Bloomberg survey has today’s ADP payrolls change at -21 million, but market only cares for shape of future data and the recovery, it seems, not the present tense.
EUR – the euro remains under pressure ahead of an EU leader meeting today (not one that is likely to grapple with the key issues at hand as it is a friendship summit with Western Balkan leaders (former component of Yugoslavia plus Albania) and we continue to watch EURUSD for signs the single currency is going over the edge.
JPY – the grinding strength continues, led by a EURJPY focus, though without any raising of the temperature in options volatility and risk reversals in USDJPY – quite the contrary in the latter as put premiums continue to shrink. Very curious if a risk sell-off (will one ever arrive again in earnest?)sees the USD or JPY coming out on top.
GBP – sterling has been unable to take the key local range support in EURGBP below 0.8700 so far and looks a bit wan against the US dollar despite the surge in risk sentiment. Not an impressive performance, and with UK still in a bit of an earlier stage in the Covid19 crisis than mainland EU countries, it will take some time to get back online with thoughts on the terms for the end of the Brexit transition period, etc.
CHF – less evidence of pressure on the euro in EURCHF – has the market given up on fighting the SNB or is the latter simply making an impressive stand ahead of 1.0500 as the last couple of weeks of sight deposit growth suggest?
AUD – a massive March surge in Australia retail sales, apparently in part driven by hoarding and price gouging for supplies being hoarded as much as added volumes. Essentially a non-factor, and we judge the recent AUDUSD reversal as tactically bearish as long as we remain below 0.6500.
CAD – the lack of reactivity to a huge surge in oil prices and despite a positive risk sentiment backdrop looks CAD bearish until proven otherwise – lack of technical inertia here, however – first sign of something on the move would be a close above 1.4150.
NZD – the NZDUSD chart looks bearish if we remains below around 0.6100-25 after the reversal this week, though likely remains tightly coupled with global market sentiment direction.
SEK – EURSEK is an interesting one to watch as the euro comes under broader pressure and as the Riksbank and the Swedish government are in a scuffle about the legality of the RIksbank’s plans to purchase corporate bonds.
NOK – EURNOK pushing down on local support ahead of Norges Bank tomorrow. Not sure how far the move can extend lower on a break without a more notable recovery in oil prices, unless we are also seeing a broadening EUR weakening.
Upcoming Economic Calendar Highlights (all times GMT)
- 1215 – US Apr. ADP Employment Change
- 2100 – Brazil Selic Rate