The G-10 rundown
USD – the US dollar broadly firmer, but not adding much to Friday’s closing levels. For now, the USD the flipside of risk sentiment in most cases. Not sure that the market will react much to further April data horrors that are likely through the Friday Nonfarm payrolls change, as focus will be on the rate of improvement starting with the May data cycle.
EUR – in addition to the comments above, perhaps worth noting that EU existential concerns are not yet fading – a slow burn issue for now, but Italian politics could be set to get more volatile as Conte is under huge pressure on plans for normalization.
JPY – the JPY performing its normal function over the last couple of sessions, but we need a big acceleration in USDJPY lower to shift attention more forcefully here.
GBP – sterling not the go-to currency in times of turmoil, the evidence suggests, but one to pick up against the Euro eventually.
CHF – the EURCHF always seems to push back lower eventually, this time after the brief rally after last week’s weekly sight deposits showed heavy SNB intervention. Last week saw another big move higher in the sight deposits. Watching 1.0500 to see if the dam breaks.
AUD – the Aussie riding two horses now, the shifts in risk sentiment on the one hand and increasing sensitivity to USDCNH / USDCNY on the other if and when the latter approaches the 2019 highs.
CAD – the Bank of Canada will have a new governor – old deputy governor Tiff Macklem – as of early June. Observers have been slow to pull out a strong angle on him except for his approval of forward guidance. The BoC was never as sorely tested in the financial crisis as it will be from here.
NZD – the kiwi outperforming the Aussie on the latest, heavier China focus. On that account, given the scale of the recent AUDNZD rally, plenty more room for consolidation without reversing the rally, though structural bulls will prefer for the 1.0500 area and the 200-day moving average just above to hold.
SEK – a terrible Manufacturing PMI out of Sweden reminds that even with Sweden’s novel policy response to the Covid19 virus, it can’t escape external exposure for its export industries. SEK under fresh pressure.
NOK – oil under fresh pressure this morning – again or thesis is that EURNOK may have peaked for the cycle, but NOK only stands a chance of a rally when we see far forward crude oil prices (say December 2021 or longer) clearly having built a base and on the mend. The next pivot to the upside at 11.70.