The G-10 rundown
USD – the USD pulling higher as risk sentiment rolling over – no major surprise there. Strains in more fragile EM also a bit more pronounced, with USDZAR poking at the cycle highs.
EUR – the euro looking vulnerable against the usual JPY, CHF and USD trio ahead of Thursday’s meeting, but weakness not particularly “isolated” yet.
JPY – the yen picking up a bid as risk sentiment sours and safe haven bonds are bid. Our chief focus on EURJPY at the moment, but the USDJPY benchmark also interesting for relative strength of those two currencies.
GBP – sterling stumbling here and not taking much heart from signs of peaking Covid19 toll and parliament getting back to work. The currency could be in for some consolidation to the weak side if risk sentiment is rolling over again.
CHF – the grind lower in EURCHF is glacial as SNB leans against CHF upside.
AUD – the Aussie at risk from weak commodity prices, though iron ore has been a notable hold out – still, the Aussie mining giants stumbled badly overnight and may be time for significant consolidation in AUDUSD and AUDJPY.
CAD – the pressure from the oil wipeout mounts – surprised USDCAD isn’t much higher as a test of the 1.4600+ top is the default scenario here assuming continued pressure on forward oil market curve and risk sentiment.
NZD – NZDUSD rolling over with risk sentiment and looks ready to probe lower again – next pivots are 0.5922 and then 0.5844, but eyeing more like 0.5600 or 0.5500 eventually on a solid consolidation in equity markets.
SEK – someone pressed the pause button in EURSEK – interested to see if the upside comes to life on a rout in risk appetite and how the market would treat a proper EU existential crisis. Recall that during the 2010-12 EU sovereign debt crisis, SEK was flying high as a safe haven. The market justifiably sees things differently this time around (cratering domestic economy, cratering external economy for its export-dependent economy, etc.)
NOK – EURNOK under upside pressure as Brent crude selling off steeply – and not just in the front month. New lows in Brent in the contracts out beyond perhaps September (i.e., lower oil prices for longer, not just for now) could see EURNOK pulling well above local 11.50 pivot area.
Economic Calendar Highlights (times GMT)
- 0900 – Germany Apr. ZEW Survey
- 1400 – US Mar. Existing Home Sales
- 0130 – Australia Mar. Retail Sales