FX Update: FX at a loss for catalysts ahead of quarter end

The G-10 rundown

USD – the USD liquidity issues will only mount from here and into year end, even if we escape further quarter-end drama here at the end of this month.  The Fed moving into a new gear and even the Trump administration activism likely needed to put a lid on the greenback.

EUR – the euro on its back foot after weak PMI’s yesterday, with the Euro Zone wide manufacturing PMI dipping to a cycle worst 45.6, led by Germany’s terrible 41.5. The IFO survey this morning out of Germany.

JPY – the yen politely inversely tracking the direction of global bond yields, with more risk off needed for the currency to put in a notable rally here.

GBP – the UK supreme court ruling today on Boris Johnson’s proroguing of parliament, with a on overturning of Johnson’s move theoretically allowing Parliament to convene immediately, though Johnson has indicated he might prorogue Parliament again on a ruling against him. Sterling looks optimistically priced here…

CHF – weak EU data diving a EURCHF sell-off, which is likely to correlate from here with bond yield direction and safe haven seeking.

AUD – the RBA’s Lowe to speak today and he should focus more on criticizing the government’s fiscal surplus stance than anything he can do on monetary policy. Supply side efforts to juice the economy don’t seem to be bearing much fruit as consumers are saving the surplus rather than splurging. This is what happens when an economy reaches the far side of a credit bubble.

CAD – USDCAD continues to fibrillate in the 1.3250-1.3300 range, with the USD outlook dominating for now. The Canadian election outcome looks highly uncertain, though implied volatility in USDCAD options is pegged near cycle lows here just under a month from the October 21 poll.

NZD – important test of the late NZD weakening over the RBNZ tonight, where the bank is expected to pass on further easing for now, likely awaiting the latest on risks from the trade war front before possibly moving 50 basis points again on a bad outcome at the next meeting. We still like AUDNZD higher for the long term, even if risk of more short term consolidation.

SEK – EURSEK stuck in limbo here technically, with SEK generally no liking bad news on the EU economic outlook, but we’re mid-range of the last to months’ price action.

NOK – still some upside momentum in EURNOK after the pair pulled away from a breakdown attempt on the dovish hike from Norges Bank last week. 10.00 the obvious pivotal level – likely needing risk off and weaker oil prices to pull notably above that level again.

Upcoming Economic Calendar Highlights (all times GMT)

• 0930 – UK Supreme Court ruling on Boris Johnson’s proroguing of Parliament
• 1005 – Australia RBA’s Lowe to Speak
• 1300 – US Jul. S&P/CoreLogic Home Price Index
• 1400 – US Sep. Richmond Fed
• 1400 – US Sep. Conference Board Consumer Confidence
• 2245 – New Zealand Aug. Trade Balance
• 0200 – New Zealand Official Cash Rate