The G-10 rundown
USD – US dollar upside pushed back on the unwind in Fed expectations of the last couple of sessions – but not yet convinced that there are legs on this move.
EUR – yes, EURUSD has squeezed back above the clear 1.1300 level that was the former support, but the pair is still in a descending channel and the bear doesn’t look fully challenged unless we pull all the way back above 1.1500. Any ugly Brexit chaos scenario could well rub off on the euro to a degree as well – and we still have the Italian budget sword of Damocles hanging over the EU.
JPY – USDJPY still within the range – we will likely need the market to revert back to pricing more Fed rate hikes to get any liftoff potential above the key 114.50 level. The chart is boring unless we challenge below 112.00 again.
GBP – sterling weakening as the resistance to the current deal is quite clear from Tory hard-liners and the DUP. Sterling will have a hard time putting in a convincing rally in the near term if it is feared that the choice is the Scylla and Charybdis of “no-deal Brexit” vs. Corbyn government.
AUD – the solid jobs report overnight adding to the AUD squeeze – this move looks very mature in some of the crosses, but there could yet be more upside short term if Trump and Xi manage to chum it up in Buenos Aires at the G20. Further out, this won’t stop the ugly unwind in the Australia housing market.
CAD – USDCAD trying to maintain altitude for a go at the sub-1.3400 highs for the cycle, but the volatility of the US-CA rate spread has been uninspiring.
NZD – kiwi relative strength versus the AUD may have been ended by this latest jobs report – certainly yesterday’s lows near the huge AUDNZD trendline are the line in the sand for the bullish hopefuls.
SEK – the krona so far surviving the slightly weaker CPI print – a cut well back below 10.25 could yet regnite hopes for a follow through lower into 10.10-10.00
NOK – can EURNOK rally hold given Brexit situation and now that oil prices may consolidate? Upcoming Economic Calendar Highlights (all times GMT)
0930 – UK Oct. Retail Sales
1000 – Eurozone Sep. Trade Balance
1310 – ECB’s Praet to Speak
1330 – Canada Oct. Home Price Index
1330 – US Nov. Empire Manufacturing
1330 – US Nov. Philly Fed Survey
1330 – US Oct. Retail Sales
1330 – US Weekly Initial Jobless Claims
1400 – Canada Oct. Existing Home Sales
1500 – US Fed’s Quarles (Voter) to testify on banking supervision
1530 – US Weekly Natural Gas Inventories
1600 – US Weekly DoE Inventories