The G-10 rundown
USD – the US dollar maintaining an even keel as the market decides that the Fed is doing enough to keep liquidity risks at bay, but not so much as feed outright USD weakness – either that or significant market participants want to see the new calendar year rolling into view before testing the waters.
EUR – The euro is throwing off few signals, with minor collateral damage from sterling weakness in the crosses over the last session or two, perhaps, but generally waiting for policy impulse and/or the rising risk of a trade policy showdown with the US.
JPY – the yen getting a boost as the risk melt-up takes a breather and as the traditionally most risk-sensitive currencies have stumbled over the last couple of sessions. Yen volatility should pick up sharply if the narrative on the global growth outlook weakens.
GBP – the sterling level here more balanced and it is probably too early to expect major further weakness as that transition period end-date of Dec 31 next year is too far over the horizon to over-anticipate now and the market may get more hopeful news on the new government moving forward with stimulus plans.
CHF – EURCHF soft, perhaps on the slight change in tone since yesterday and GBP weakness (GBPCHF has been in for a rough ride)
AUD – again we note AUD weakness and another extension of that weakness would suggest the currency is actually beginning to break down again. Watching the employment data up tonight out of Australia.
CAD – the CPI release up today. I tweeted a link to a Wolfstreet.com article reminding why I have longer term concerns about the Canadian economy on the magnitude of private debt in Canada, where the private sector has leveraged up since the global financial crisis, the opposite of the US, where private sector indebtedness has fallen (as they finance the public sector profligacy, on the other hand…).
NZD – the kiwi a bit soft ahead of tardy Q3 GDP report tonight – and at risk of a sharp reaction if the surprise is negative there, given its recent runup in the crosses.
SEK – how does the Riksbank surprise the market tomorrow on the dovish side? Perhaps by underlining that policy can go either way as the situation develops as opposed to vowing that negative rates were a mistake and a thing of the past.
NOK – EURNOK so far unable to punch through 10.00 on the run lower despite maximum support from the backdrop – will need to see first couple of weeks of trading in the New Year to know whether it was seasonality at year-end restraining NOK’s potential.
Upcoming Economic Calendar Highlights (all times GMT)
- 0900 – Germany Dec. IFO Survey
- 0930 – UK Nov. CPI
- 1015 – US Fed’s Brainard (Voter) to Speak
- 1330 – Canada Nov. Home Price Index
- 1330 – Canada Nov. CPI
- 1530 – US DoE Crude Oil and Product Inventories
- 2145 – New Zealand Q3 GDP
- 2145 – New Zealand Nov. Trade Balance
- 0030 – Australia Nov. Employment Change /Unemployment Rate