The G-10 rundown
USD – the weaker greenback so far merely a consolidation of the prior USD rally. Not sure we get any signal of interest from the FOMC minutes this week and pulling a signal on local USD drivers here difficult.
EUR – stimulus in China is nominally EUR supportive, but only to the extent that EU export activity begins picking up. EURUSD needs to survive above 1.1000 to stay in neutral or better here.
JPY – USDJPY crept back towards 109.00 on the strong risk sentiment, but got some support broadly last week as long safe haven sovereign bonds put in a rally, a driver that will likely prove the most important for whether the formerly weak JPY is turning the corner back to strength.
GBP – the polls have oddsmakers pointing to a high likelihood of a Conservative majority after the December 12 election. Boris Johnson was also out talking up corporate tax cuts at the weekend, adding to promises of strong fiscal expansion – and all of the above sterling supportive. GBPUSD back challenging close to the key 1.3000 on all of this.
CHF – EURCHF has bounced strongly after a test below 1.0900 late last week (intervention fears – no evidence in the SNB’s weekly data…) but remains rangebound between 1.0850 and 1.1050.
AUD – as discussed above, AUDUSD bounced at a key technical level, but we should already be disappointed with the Aussie’s performance in this environment, though iron ore prices remain sluggish and the Australia mining giants are not participating in the risk melt-up.
CAD – The Bank of Canada Governor Poloz set for a “fireside chat” on Thursday, which should further deepen the market’s understanding of the bank’s thinking on its new status as owner of the developed world’s highest policy rate. The recent USDCAD rally was held back from higher levels by a softer greenback last week.
NZD – the market still reeling from last week’s surprise no-cut from the RBNZ – longer term AUDNZD trades might consider that the pair is re-entering a more compelling area here near 1.0600.
SEK – EURSEK having a look at that pivotal 10.60 area and needs to cut through to make a point – strong Euro, strong EU macro data and especially any signs of fiscal stimulus from the EU and more importantly Sweden would be welcome for SEK bulls. Now that the anti-immigrant Sweden Democrats are polling as the nation’s most popular party, the odds have to be rising of defensive action from the sitting government.
NOK – EURNOK trying to get interesting on Friday and overnight with a look near the middle of the key 10.00-05 level and really needs to cut through this to offer compelling signs that the highs for the cycle are in the rearview mirror.
Today’s Economic Calendar Highlights (all times GMT)
- 1500 – US Nov. NAHB Housing Market Index
- 0030 – Australia RBA Meeting Minutes