The G-10 rundown
USD – the US dollar looking consistently weak and vulnerability could increase if we see a weak jobs report tomorrow. But to get the technical situation moving forward, we need a more notable break lower in the major USD pairs.
EUR – the euro firm but not inspiring confidence. Risks to growth in Europe include widespread French strikes set to slow the economy to a halt in coming days, while Germany’s Oct. Factory Orders hardly suggest an imminent turnaround in Germany industry.
JPY – market hardly registering Japan’s stimulus package, coming in at some ¥13 trillion or $120 billion, or just under 2.5% of GDP. The yen is soft as risk sentiment has recovered and bond yields pull higher – the 10-year JGB is within striking distance of a 0% yield again.
GBP – sterling moving aggressively higher on the assumption of a smooth Brexit and Boris Johnson’s promise of a powerful fiscal boost set in motion within 100 days of his election. The next hurdles for sterling in EURGBP and GBPUSD are for
CHF – the franc easing lower in sync with improved risk sentiment and the boost to bond yields since yesterday.
AUD – the Australia retail sales report for October in at a weak 0.0% MoM and +2.1% year-on-year, the latter the weakest reading since a couple of lower readings back in 2017.
CAD – Bank of Canada and shift in sentiment and neck-snapping reversal in crude oil brining CAD support – but we’re only back to mid-range – need a more profound shift in the USD outlook to get USDCAD down through the key 1.3000 area, though it has never been cheaper than now to take a long-term view in the options market, with implied volatility for USDCAD out the curve at record lows.
NZD – wouldn’t trade deal hopes materializing into a deal support AUD more than NZD? Still no sign of a turnaround in AUDZND, while NZDUSD is mulling a break of the 200-day moving average and poked at a major 61.8% Fibo retracement overnight at 0.6567
SEK – the krona sensitive to shifts in the global economic outlook, which are in turn sensitive to US-China trade deal headlines for the moment. SEK looking resilient here after miserable Sweden PMI’s in November – 10.50 in EURSEK the next technical hurdle to overcome for a run at 10.25-20.
NOK – no surprise to see EURNOK reversing back lower after the shift in trade-deal hopes yesterday and related bump in crude oil prices. NOK reactive to OPEC and OPEC+ meeting outcomes today and tomorrow. Otherwise, we won’t have a good read on NOK potential until January, when seasonal headwinds ease.
Today’s Economic Calendar Highlights (all times GMT)
- 1000 – Euro Zone Oct. Retail Sales
- 1330 – Canada Oct. International Merchandise Trade
- 1330 – US Weekly Initial Jobless Claims
- 1330 – US Oct. Trade Balance
- 1300 – Canada Bank of Canada’s Lane to Speak
- 1500 – Canada Nov. Ivey PMI
- 1500 – US Fed’s Quarles (Voter) to Speak
- 1500 – US Oct. Factory Orders