The G-10 rundown
USD – the flipside of the global surge in risk assets.
EUR – the euro may be held back a bit by its negative yielding status and the wait for stimulus as well as the ECB set to deliver new easing tomorrow, but don’t see the latter as a major event risk with so much already priced in.
JPY – the yen more or less tracking the USD in the crosses here and likely to continue to do so unless risk sentiment sours badly, which would be JPY supportive unless the source of angst is rising US yields, in which case you have confusing crossfire.
GBP – very short term calls are one way to position for a breakthrough in the Brexit logjam – plenty of binary risk at any point starting from any statements made after this evening’s Brexit dinner in Brussels.
CHF – Is EURCHF fearing a more aggressive ECB? Doubt that the latter is much of a catalyst here and suspect that global bond yields are more important, with rising yields potentially pushing back against CHF strength.
AUD – the go-to currency if the current environment extends, especially metals prices.
CAD – Bank of Canada meeting later today – not expecting anything there. CAD could be set for a run for 1.2500 quickly on another surge higher in crude oil prices together with a strong run in risk assets into year end – the caveats are listed in the USD commentary above.
NZD – the kiwi at risk of relative weakness in the crosses if commodities continue to grab the headlines – thinking especially of AUDNZD here, where another surge toward 1.0600 would begin to disrupt the late downtrend.
SEK – the krona has taken a turn for the worse in not responding to what normally have been supportive conditions – seasonal pension flows might be a driver and we like fading SEK weakness against the euro eventually, with the caveat that 10.30 falling in EURSEK could see a bit more of a squeeze.
NOK – a real breakdown in EURNOK below 10.50 may require a new leg higher in Brent above 50 dollars/ barrel.