The G-10 rundown
USD – the big dollar roaring back to life on this latest deleveraging – if not this week, then next week will see all out efforts to bring USD liquidity on an as-yet-unseen scale.
EUR – showtime for Lagarde – clear signs of injecting EU banks and coordination with EU governments critical for reviving confidence in the single currency.
JPY – the yen continues to stand tall here today, but has failed to post new highs against the US dollar as US long treasuries came under pressure yesterday – a development that reversed sharply overnight, however. Still prefer USDJPY lower here.
GBP – sterling getting punished – perhaps still some residual speculative longs to clear out and perhaps on the risk of an isolated UK post-Brexit – decline in GBPUSD looks worrisome and could see test of lows on a failure of
CHF – the franc picking up a stronger bid today, perhaps as market fears an insufficiently strong ECB response – status for EURCHF key in today’s sessions. Let’s not forget that SNB owns a lot of bonds and stocks if all of these are under pressure from here….
AUD – the Aussie following the risk off script and trading below. This feels far from over if the risk deleveraging doesn’t stop. BHP Billiton stock has collapsed – an important indicator of expectations for Oz economy.
CAD – oil price war brings risk of test of full cycle top of 1.4500+ in USDCAD if this continues.
NZD – kiwi seen as less exposed than Aussie to cyclicality of global growth, but liquidity also to consider as a NZD negative – AUDNZD working down into important long term area.
SEK – EURSEK ripped back higher and close to cycle highs after a weak CPI number and on deepening risk off today – value long term – but we can go anywhere with SEK for now – and especially NOK
NOK – EURNOK exploding higher – can’t keep this pace of NOK declines without official response soon, but if oil is going to 25 there is still more downside risk.
Upcoming Economic Calendar Highlights (all times GMT)
- 1230 – US Weekly Initial Jobless Claims
- 1245 – ECB Meeting
- 1330 – ECB President Lagarde Press Conference
- 1430 – US Weekly Natural Gas Storage