The G-10 rundown
USD – the USD pops stronger nearly across the board – now “the hold” of levels taken critical for whether the move can continue.
EUR – the EURUSD breaks key support overnight – now a question of whether we see further directional momentum on the break. The UDS rally slowing this morning as European equities market are trying to piece together a rally (may be some circular logic, as some of the strength there likely due to euro weakness).
JPY – as USDJPY toys with the key local resistance of 105.00-50 in USDJPY, it is really a side story to the broad JPY strength elsewhere, which is likely to continue if global risk sentiment – especially in credit/fixed income/EM continues to sour.
GBP – sterling cutting through 1.2750 against the USD – a massive chart level –resistance on the way up, then a key pivot support on the way down before the break yesterday daxand where the 200-day moving average rests. The UK coronavirus situation is seeing terrible headlines, but somehow the flash Sep. services PMI for the UK avoided the weakness seen in France and Germany – although their surge started a bit later.
CHF – the franc bows before the mighty USD and JPY and here we have USDCHF back at that key level that as a focus on the way down around 0.9200.
AUD – a Westpac economist said the RBA will cut the policy rate to 0.1% in October, helping the Aussie lower. The local downside pivot level near 0.7200 is well back in the rear view mirror as the break opens up for the structurally important 0.7000 level.
CAD - the loonie passive here and the USD strength seems to be rubbing off on the loonie in the crosses – note AUDCAD sell-off etc. USDCAD technical situation is critical in the 1.3300-50 zone, a break above which risks a larger downtrend neutralization.
NZD – the RBNZ left rates unchanged and announced a new funding-for-lending programme as a way to stimulate the economy that may be launched at the November RBNZ meeting and still feels comfortable in signaling the intent to take rates negative. The NZD was back to more or less unchanged in the crosses after an odd surge higher on the announcement. NZDUSD is looking ready to dive to next pivot level into 0.6500 and below.
SEK – impressive NOKSEK this week and SEK supported at the margin yesterday as the Riksbank kept its zero rates forecast (rather than indicating a lean for negative rates) expressing a preference for QE as the chief policy tool). Like fading EURSEK rallies as long as we stay south of 10.60
NOK – EURNOK pulling up close to the major 11.00 area in EURNOK – given market correlations it could squeeze higher if risk appetite comes unglued again and crude oil hits new lows, but taking a stand in this 11.00 area is tempting, if only through options initially.
Upcoming Economic Calendar Highlights (all times GMT)
- 1345 – US Flash Sep. Markit PMI
- 1400 – US Fed Chair Powell before House Panel on Covid-19
- 1500 – US Fed’s Evans (Non-voter) to Speak on Economy and Monetary Policy
- 1700 – US Fed’s Kashkari (Voter) to Speak
- 2245 – New Zealand Aug. Trade Balance