The G-10 rundown
USD – given that so much of the Fed’s uncertainty centers on trade issues, we're unlikely to see the FOMC rate decision and guidance making any strong statements this time around as we await trade relationship developments between the US and China in October.
EUR – the euro firmed late last week on the sense that the ECB is done for the cycle and the next policy direction is fiscal, which tends to be FX supportive – EURUSD still needs another leg higher (last week’s rally stopped at the first key Fibo) if it is to show promise in neutralizing the long slide and showing a turn back higher.
JPY – as we discuss above, the yen outlook rooted in the direction of bond yields and risk appetite, which is beginning to reach extreme levels of complacency by our measures.
GBP – sterling longs getting ambitious into the 1.2500 area in GBPUSD and below 0.8900 in EURGBP recently, but we need real developments pointing to a path out of the Brexit morass for sterling to deserve the strength.
CHF – EURCHF looked like it wanted to go higher before the weekend’s disruptions – likely to inversely track global bond yields.
AUD – almost no trading range in major AUD crosses as we await the direction in the USD and the pivotal area overhead in AUDUSD – a few AU data points this week, but broader market themes likely to dominate.
CAD – USDCAD looked as if it were busy trying to reverse higher before the weekend’s oil price earthquake. Stay tuned, as reattaining the 1.3300+ area would neutralize the recent sell-off (and we are sceptical on the market’s expectations for BoC policy).
NZD – a solid follow through higher in our AUDNZD long on Friday- important test this week on relative data releases as Australian employment data is up on Thursday together with NZ Q3 GDP data.
SEK – EURSEK looking heavy post-ECB but needs to punch through the 10.60 level to merit attention. As we pointed out on our Technical Chart highlights on Friday, the longer term momentum of the long-standing rally is flagging.
NOK – a quite modest NOK rally overnight given the scale of the oil move as the concerns immediately center on longer term demand if oil prices remain elevated. EURNOK in a limbo ahead of Thursday’s Norges Bank meeting, where expectations are divided on whether the bank stands pat or hikes 25 bps.
Upcoming Economic Calendar Highlights (all times GMT)
- 1230 – US Sep. Empire Manufacturing
- 1230 – Canada Aug. Existing Home Sales
- 2100 – New Zealand Q3 Westpac Consumer Confidence
- 0130 – Australia Q2 House Price Index
- 0130 – Australia RBA Minutes