The G10 rundown
USD – pivotal into next week on the reaction to G20 developments. The market has traded rising hostility as USD positive, while a boost to risk sentiment on something constructive emerging would likely prove sharply USD negative, given the Fed’s easing off on the guidance gas.
EUR – German bunds are within a few basis points of their range lows of over a year around 30bps – this points to a weak outlook for the Eurozone. Any upside for EURUSD here will likely be driven by USD weakness rather than euro strength.
JPY – paint is drying here as we await for USDJPY to either move and close north of 114.00 or below perhaps 112.00, although the downside technical are murkier. A broad risk off shock needed to test whether JPY as safe haven works any more.
GBP – sterling mostly on its backfoot on heightened uncertainty. Maybe the UK can get rid of the Irish border issue by having Northern Ireland cease to exist ? (FT article – paywall
CHF – a weak Swiss GDP print brings a different spin to CHF while fading attention directed at Italy helps boost EURCHF back into the range as well.
AUD – the highest beta G10 currency to the developments at the G20 over the weekend as crowded shorts have backed out of their positions in droves ahead of this weekend. The Reserve Bank of Australia meeting next week is unlikely to bring anything interesting. Credit crunch risk for Australia rising.
CAD – Watch for latest GDP print today. The Bank of Canada is expected to stand pat at 1.75% at next Wednesday’s meeting. This weekend’s G20 could provide a dramatic pivot for oil prices as Saudi Arabia’s Mohammad bin Salman and Russia’s Putin will put their heads together in Buenos Aires. If oil has bottomed here, we will look for technical setups indicating that AUDCAD has turned (wary of jumping in as G20 headlines could aggravate the AUD squeeze in the near term).
NZD – the market has given up on trading the kiwi, as the lowest daily trading in many years attests. Pass, although the 1.0600 area in AUDNZD is rather interesting as a multi-touch trendline comes in around there.
SEK – a negative GDP print yesterday souring the SEK’s rally chances and eroding confidence in the Riksbank’s hike path. EURSEK looking at risk of a squeeze back into the higher end of the longer term range on a close above 10.35.
NOK – oil prices need to ride to the rescue here or else as EURNOK looks like a bull flag setup looking for follow through higher until proven otherwise with a powerful sell-off bar or two. Upcoming Economic Calendar Highlights (all times GMT)
1000 – Eurozone Nov. Flash CPI
1000 – Eurozone Oct. Unemployment Rate
1330 – Canada Sep. GDP
1400 – US Fed’s Williams to speak on Global Economy
1445 – US Nov. Chicago PMI
G20 Gets underway today