The G-10 rundown
USD – further USD strength until the Fed responds in sufficient size is the default stance here.
EUR – the euro getting less attention at the moment – most interesting test for the single currency is a chunky and persistent (i.e., more than a single session) risk-off move, which tests the narrative of the currency having become the funding currency of choice for all manner of corporate debt issuance and carry trade shenanigans.
JPY – see above on the JPY, the one currency dominating the market’s attention at the moment – and the EUR comments may also be relevant for the JPY.
GBP – sterling not enjoying this backdrop – GBPUSD has reversed badly and EURGBP is slipping back higher – sterling needs to pick up bids on hopes for a fiscal splash to remain a story.
CHF – EURCHF settling lower – whether historic correlations with risk appetite continue from here (see EUR comments above) our chief interest.
AUD – jobs report overnight seen as weak and Covid-19 news flow not helpful – AUDUSD punching to new cycle lows.
CAD – the CAD resilient on strong equities and ongoing crude oil bounce – but we’re no fans of CAD as Canadian credit cycle set to turn. Watching top of the zone in USDCAD as catalyst.
NZD – following AUD lower with market unwilling to differentiate much for the moment between AUD and NZD.
SEK – reversal zone for EURSEK is 10.60-65 if this recent bearish pattern is set for failure – risk appetite and growth outlook important factors (if both negative, raises risk of reversal higher for test of highs..
NOK – EURNOK pulls back from the brink of 10.00 as market doesn’t like the injection of volatility and weaker risk sentiment this morning – that is the line in the sand if the pair is to trade lower.
Upcoming Economic Calendar Highlights (all times GMT)
- 0930 – UK Jan. Retail Sales
- 1230 – Euro Zone Meeting Minutes
- 1300 – Poland Central Bank Minutes
- 1330 – Canada Jan. House Prices
- 1330 – US Feb. Philly Fed Survey
- 1330 – US Weekly Initial Jobless Claims