The G-10 rundown
USD – fighting back from local lows on weakness in risk sentiment, but as note previously, the transmission seems weak. Noting long US yields punching on cycle lows.
EUR – German growth weaker than expected at -10.1% QoQ and Spanish GDP up tomorrow expected at -16.3% QoQ with fresh virus breakout threatening domestic activity and tourist arrivals. Ditto for Italy, which also reports tomorrow – and expecting -17.3% QoQ there (an annualized approximate -50% relative to the approx. -35% expected from the US tomorrow).
JPY – the yen not getting the support one would expect, given weak risk appetite today and strong long bonds. The most significant hurdle for the JPY is probably the reflationary we discuss for the Aussie.
GBP – sterling surprisingly punchy here, with 1.3000 falling again in GBPUSD this morning – perhaps driven as much by EURGBP as that pair is back close to the interesting 0.9000 level (the major pivot toward 0.8950-38).
CHF – the franc picking up strength against the euro again and wiping away the rest of the rally from early this week – pity the poor SNB if the USD weakens afresh and keeps USDCHF pressing at new major lows.
AUD – as noted above, the Aussie is mostly in the thrall of metals prices here – especially iron ore, which is near the post-COVID 19 highs and at historically elevated levels. Somewhat surprised to see the AUD immunity to the escalating tensions between the US and China.
CAD – the loonie in for a bit more weakness on oil prices slipping badly at times today – and the USDCAD pair never took out the early June low of 1.3316 – but the pair would need to bounce above 1.3500 and the 200-day moving average just above to register a bullish development.
NZD – NZDUSD never broke the major resistance on the scale of the AUDUSD resistance broken – most focus here on AUDNZD and whether the move above 1.0755 sustains.
SEK – outlook concerns for Europe and weak risk sentiment applying downside pressure on SEK, but concerns for a bigger squeeze don’t pick up until above 10.35-40 and the overall effort is picking spots to get short of EURSEK
NOK – EURNOK pulling sharply higher on weaker oil prices and note that the pair is near 1-month range highs of 10.75, with squeeze risk above if oil prices and risk sentiment continue to sour on outlook concerns. 10.95-11.00 is the next zone of import there.