The G-10 rundown
USD – the US dollar has managed rather well, considering the “Not QE” Fed balance sheet expansion announcement on Friday. But the action in USD pairs lacks conviction.
EUR – waiting for the October ZEW Survey out of Germany this morning, which is expected to show a further worsening in current conditions and expectations – we need good news out of the EU economy and/or a shift in policy focus to fiscal to get a sustained bid under the euro.
JPY – the yen remains on its back foot as global long yields remain in the upper part of their recent range and to see this change, the mood needs to change back to risk off and lower yields. Meanwhile, USDJPY is not far from a rather large area near 109.00, though to sustain a break above that level that could require a game changing move above 2.00% in US 10-year benchmark.
GBP – sterling firmer, if choppy, but plenty of questions remains – risk/reward certainly more balanced at these levels.
CHF – EURCHF slipping back above 1.1000 this morning – further upside requiring some combination of good news on Brexit, positive EU developments and/or higher global bond yields. Regardless, a close reasonably above 1.1000 would look promising from a technical angle.
AUD – RBA minutes show the bank is nervous about the approaching lower bound but moved anyway – AUDUSD looking heavy if it cuts another 50 pips lower here, but it has been going nowhere for the last two months.
CAD – David Rosenburg (@EconguyRosie on Twitter) pointed out on Friday that private payrolls were actually a weak -21k in September, while the government payrolls rose over 50k for the month, which he attributes to possible election considerations. The CAD reaction to a volatile data series does look a bit overdone, given action elsewhere in USD crosses, in particular.
NZD – the Q3 CPI up tonight on whether the kiwi looking to cement this turn lower as the market might have to price in a November RBNZ cut on a bad miss (currently at virtually zero odds).
SEK and NOK – NOK not liking the turn lower in oil and EURNOK poking back to the highs for the cycle. The SEK is looking the other way, but EURSEK only looking at technical reversal potential if it trades back below 10.80-75.
Upcoming Economic Calendar Highlights (all times GMT)
- 0900 – Germany Oct. ZEW Survey
- 1230 – UK BoE’s Vlieghe to Speak
- 2145 – New Zealand Q3 CPI