Market-friendly Xi speech boosts risk appetite

The G-10 rundown

USD – the USD is wilting as risk appetite returns and the market perhaps gets back to pondering the US fiscal outlook. Next status check on the greenback up with tomorrow’s US CPI release and FOMC minutes.

EUR – the euro is gaining the upper hand against the weak JPY and USD at the moment, but not much else. Implied and realized volatility continues to collapse as traders are at a loss for a near-term policy catalyst for the single currency.

JPY – the JPY is at the bottom of the heap at the moment and may stay that way if the mood can stay positive across global markets for a few sessions. Next pivotal test over the Bank of Japan meeting on April 27.

GBP – sterling mulling the cycle lows in EURGBP – not sure what it will take to push the pair over the edge, but the technicals look promising. Interesting profile in Bloomberg, by the way, of the new UK-friendly German finance minister Scholz.

CHF – EURCHF looking at those cycle highs above 1.1800 soon and could taken them out if we can put together a few days of positive sentiment and rising bond yields.

AUD – the Aussie trying to get something going with its best rally day in some time overnight, likely driven by the response to Xi’s speech. If AUDUSD can work back above 0.7800 again, the rally may turn into something bigger than all previous bounce attempts and confound our bearish expectations for the currency for now.

CAD – USDCAD has dropped back toward its 200-day moving average on the USD weakness and resurgence in crude prices

NZD – the kiwi pulling toward the high end of the range versus the greenback again – are we really going to challenge the highs for the cycle again. Would expect increasingly stern Reserve Bank of New Zealand observations on the currency as soon as the May 10 RBNZ meeting as we await an impression of new governor Orr’s style.

SEK – the krona going nowhere at the moment near cycle lows and waiting for whether the Thursday CPI throws the currency a lifeline. The weak Norwegian CPI print this morning has thrown at least a temporary spanner in the works for NOKSEK bulls.

NOK – an ugly miss on the March CPI data weighs against the NOK and may cap its ambitions at the moment, as the core CPI print stumbled to 1.2% year-on-year and saps anticipation for Norges Bank rate hikes.

Upcoming Economic Calendar Highlights (all times GMT)

   • 0930 – UK BoE’s Haldane to speak 
   • 1000 – US Mar. NFIB Small Business Optimism 
   • 1215 – Canada Mar Housing Starts 
   • 1230 – Canada Mar. Building Permits 
   • 1230 – US Mar. PPI  
   • 2230 – US Fed’s Bostic (Voter) to speak