The G-10 rundown
USD – the greenback showing little volatility as we await incoming data or any catalyst, trade-deal or otherwise that can generate directional conviction.
EUR – not seeing a reason to get excited about the Euro’s prospects until we see stronger, more unified policy signals from the EU and a sense that the EU economy is turning around (next interesting data on Friday with the flash Nov. PMIs) . Bad US-China trade deal outcomes could be bad for the euro.
JPY – an interesting rally yesterday that quickly fizzled and if USDJPY heads back above 109.00, the quality of the recent bearish reversal there fades further. Treasuries heading back lower this morning together with yet another surge in risk sentiment driving JPY weakness this morning in Europe.
GBP – sterling wants to head higher, but totally lacks momentum and traders may look for binary outcomes after the elections for a larger, more impulsive move via options structures (call spreads, for example, assuming a reasonably large rally).
CHF – the franc drifting around without conviction – watching 1.0850 and 1.1050 in EURCHF for a reason to pay attention.
AUD – a small downdraft in the AUD overnight on the news as the RBA minutes revealed that the RBA felt that a cut was in play at the recent meeting, but decided against it to avoid unsettling consumers. The downside level of 0.6770 a pivotal one if the USD perks up again.
CAD – waiting for USD direction and any signals from Canadian data and the BoC. Generally seeing more risk of a dovish than hawkish surprises from the BoC, but BoC’s Poloz could simply muse on the inefficacy of monetary policy in general.
NZD – NZDUSD trying to look peppy near local resistance, but the 0.6465 area highs is still some way off and we see AUDNZD value from here down to perhaps 1.0500 for longer term structural longs.
SEK – EURSEK is heavy at the bottom of the zone, but we have been here many times before and would like to see a distinct catalyst to encourage a downside view – EU and/or Sweden data looking up, for example, but more compelling would be a fiscal impulse from one or both.
NOK – EURNOK bears suffering a setback yesterday as the new local lows reversed and the 10.05-00 pivot zone survives. The inability to cut lower given the supportive NOK-backdrop is a disappointment. Seasonality will continue to weigh against the NOK into year-end.
Today’s Economic Calendar Highlights (all times GMT)
- 0900 – Italy Industrial Sales/Orders
- 1330 – Canada Sep. Manufacturing Sales
- 1330 – Canada Oct. Home Price Index
- 1330 – US Oct. Housing Starts and Building Permits
- 1400 – US Fed’s Williams (Voter) to Speak
- 1800 – Canada Bank of Canada’s Wilkins to Speak