The G-10 rundown
USD – the big dollar the flipside of risk sentiment as we all wonder whether the Fed’s move to backstop nearly everything is enough to turn the USD lower – a key component of finding the lows in global markets for the cycle, wherever that point is.
JPY – the yen hit overnight with strong risk sentiment and as Japan suffering a new outbreak of Covid19 that has triggered emergency orders in Tokyo. Will still likely come through stronger almost across the board on any fresh deleveraging move.
EUR – key focus over Eurogroup meeting tomorrow as outlined above and EURUSD and EURJPY downside risks the focus if we don’t see a strong front of solidarity on the fiscal front.
GBP – the market quickly erased the sterling sell-off likely inspired by the news UK PM Boris Johnson has been hospitalized due to persistent Covid19 fever. This quick comeback is encouraging for sterling bulls versus the euro – which found a low around the 200-day moving average.
CHF – even as the JPY weakens and risk sentiment recovers, EURCHF hardly lifts its head. The latest weekly sight deposits out this morning show that the SNB still having to lean heavily against CHF appreciation risk – let’s see if there is any reactivity around the Eurogroup meeting tomorrow along the lines of rising or falling EU existential risk.
AUD – the Aussie bounce rather modest relative to the comeback in risk sentiment – still see a stance of fading strength as long as we trade below recent highs in AUDUSD. No expectations tonight that the RBA brings anything new to the table.
CAD – we have noted our concerns on CAD several times in recent updates – downside risks prevail on oil and in dealing with Canada’s domestic credit crunch.
NZD – what goes for Aussie goes for the kiwi and perhaps more so given the latter’s more elevated valuation.
SEK – Sweden at risk, as we have noted, from a slower response to the Covid19 outbreak – but SEK traders have fallen asleep – reluctant to take a stand in either direction in the important 10.85-11.00 area. Still some SEK downside risk if risk deleveraging and EU existential risks rise – but SEK has gotten very cheap.
NOK – the krone getting a boost from the comeback in crude oil overnight and hopes that a production cut deal can be hammered through, but skeptical on any ability to work back down below 11.00 in EURNOK as long as oil prices haven’t staged a major recovery.
Upcoming Economic Calendar Highlights (all times GMT)
- 2230 – Australia Mar. AiG Performance of Services Index
- 0430 – Australia RBA Meeting