The G-10 rundown
USD – on the ropes, as noted above, but let’s give this market a couple more sessions to see if the breakouts in USD pairs are multiplying – and whether the move above resistance in the classic risk proxy, the S&P500, is confirmed.
EUR – EURUSD edging higher today and nearing the 1.1000 level again for the third time since mid-April. Happy to trade the break from a technical perspective, but preferring a combination of buying perhaps 2-month calls and a quick in-and-out on spot trades on a break.
JPY – the JPY weak together with the USD on strong risk sentiment, with the key resistance in USDJPY still in place up above 108.00 and implied volatility collapsing in line with the collapse in bond market volatility.
GBP – sterling finding support, perhaps as end to UK lockdowns seen here soon and on the weight of stronger risk sentiment and as the CBI data today on reported sales in May was less bad than expected. Still concerned about GBP upside potential if the BoE does go down the negative policy rate rout.
CHF – less relief for EURCHF than one would have thought, given the strong impression on other EU existential barometers made by the Merkel-Macron recovery plan.
AUD – the first G10 currency to break higher versus the US dollar together with NZD as the Aussie is arguably supported by the reflation narrative as Australian mining giants equities push to new highs here on strong commodities performance. Both AUDUSD and AUDJPY nearing their respective 200-day moving averages if the momentum continues higher here.
CAD – the oft-tested 1.3850 area in USDCAD coming into view again, and not likely to survive if the momentum in equities and crude oil continues here – still some work to do to reverse the rally – arguably sub-1.3500 needed for that.
NZD – a currency that looks an overachiever given the RBNZ’s clear intent to move to a negative interest rate policy and this currency one to watch for a violent direction . Like buying dips in AUDNZD, though unfortunately plenty of room for the consolidation to deepen before the rally possibly resumes further out.
SEK – Sweden making noises about recovery plan – good luck when you’re not even in the currency…the backdrop could not be more supportive of SEK so a bit taken aback that EURSEK hasn’t tested the last support zone into the low 10.40’s.
NOK – EURNOk having a look lower again and USDNOK poking to new lows – fully coincidental with oil and risk sentiment and actually a bit disappointed that the NOK hasn’t managed more given the recent fiscal Norges Bank fiscal package announcement.
Upcoming Economic Calendar Highlights (all times GMT)
- 1230 – US Chicago Fed National Activity Index
- 1300 – ECB to publish financial stability review
- 1300 – US Mar. S&P CoreLogic Home Price Index
- 1400 – US Apr. New Home Sales
- 1400 – US May Consumer Confidence
- 1430 – US May Dallas Fed Manufacturing
- 2100 – New Zealand RBNZ to publish financial stability report