The G-10 rundown
USD – the big dollar seems so inert to anything at the moment – we merely note that the Fed remains behind the curve as inferred from the flat US yield curve and will watch key incoming data through the end of this week for reactivity (ISM Non-manufacturing and ADP employment change today, NFPs on Friday).
EUR – the euro rather inert here as well – trading like a safe haven currency in the crosses and could be an interesting one if the markets decide the coronavirus situation was not what we should fear, but a real struggle in the global growth outlook.
JPY – the yen dropped sharply yesterday on the double whammy of sharply higher yields and max risk-on, but we note that after the markets have settled a bit in reaction to the virus treatment claims out of China that US Treasury futures are only a hair lower.
GBP – the wily sterling is churning back and forth as we await firmer news on the EU trade deal.
CHF – a kneejerk lower in CHF on the risk on move and bond yields trading higher since yesterday, and momentum starting to wane on this recent run lower – probably need severe risk off to get the pair to new lows.
AUD – the Aussie bouncing strongly in the crosses this morning – but plenty more wood to chop to get the currency in the clear for bulls.
CAD – USDCAD has found resistance near the top of the range but we need more than risk on to get the pair back lower – we need a much stronger North American oil price as the US WTI benchmark has been below 50.00 on this latest slide.
NZD – on its back foot and would look more to AUDNZD for interest in expressing a weaker NZD than in NZDUSD if Chinese markets take heart from the latest developments.
SEK – the stronger Swedish PMI’s and then this morning’s coronavirus news have seen EURSEK reverse the recent rally – making life more comfortable for bears looking for a retest of the sub-10.45 lows if we can close today well below 10.60.
NOK – a huge boost to the NOK from the backdrop, especially on this morning’s news on possible coronavirus treatment, but need a solid turnaround in crude and considerable further NOK rally to wipe out the damage done to NOK on this latest slide from below 9.90 to the 10.25+ of earlier this week.
Today’s Economic Calendar Highlights (all times GMT)
- 1215 – ECB President Lagarde to Speak
- 1315 – US Jan. ADP Employment Change
- 1330 – US Dec Trade Balance
- 1330 – Canada Dec. Int’l Merchandise Trade
- 1500 – US Jan. ISM Non-manufacturing
- 1530 – US Weekly DoE Crude Oil and Product Inventories
- 1730 – Canada Bank of Canada’s Wilkins speaks
- Time? Brazil Selic Rate
- 0030 – Australia Dec. Retail Sales
- 0030 – Australia Q4 NAB Business Confidence