The G-10 rundown
USD – the greenback putting on a show of resilience despite the ongoing risk appetite semi-meltup – an interesting divergence with recent behaviour that bears monitoring over coming sessions.
EUR - EURUSD bulls hoping for a breakout and wanting to celebrate the positive headlines on US and the Europe likely avoiding any showdown over auto tariffs for the moment have instead seen the pair drifting back lower – if we head back below 1.1100, the outlook turns increasingly neutral tactically.
JPY – the yen a proxy for global safe haven bonds here and likely to remain that way, with all eyes on the US long end and the 2.00% level for the 10-year benchmark.
GBP – election uncertainties are preventing directional moves in sterling for now and keeping implied volatility from falling further, with the 3-month implied still around 10%. Interesting to see how the consumer is holding out in today’s UK Services PMI as the UK credit impulse has collapsed for several quarters.
CHF – not getting a signal from the franc.
AUD – the RBA not surprising in any way and the market is priced for a pause here. Most interesting from here is whether the coming US-China trade deal has already been priced in, on the assumption we’ll only see a symbolic phase one deal with few implications for global growth.
CAD – CAD longs still licking their wounds from the dovish caution expressed by the BoC last week – 1.3200 beginning to look like an important upside pivot in USDCAD if the lay of the land shifts in favour of the USD. Energy prices doing all they can to support CAD in the background.
NZD – important employment data tonight for NZD traders – particularly given the pivotal area in NZDUSD around 0.6425 explored yesterday and important for the relative strength battle in the very choppy AUDNZD cross.
SEK – the backdrop and steep backup in Swedish short yields supportive of a EURSEK breakdown- but seeing is believing. Meanwhile, we are concerned about the trajectory of the Swedish economy as it dips into recession – the latest Services PMI survey and other noise out of Sweden today up this morning as noted in calendar highlights below.
NOK – crude oil prices and strong risk sentiment are supporting NOK in the background and we have a very nice symmetrical rejection in EURNOK of the prior rally wave, but need to punch down through 10.05-10.00 from here to suggest the lows are in for the krone.
Upcoming Economic Calendar Highlights (all times GMT)
- 0830 – Sweden Sep. Industrial Orders
- 0830 – Sweden Riksbank minutes
- 0930 – UK Oct. Services PMI
- 1330 – Canada Sep. International Merchandise Trade
- 1330 – US Sep. Trade Balance
- 1445 – US Oct. Markit Final Services PMI
- 1445 – Sweden Rikbank Governor Ingves to Speak
- 1500 – US Oct. ISM Non-manufacturing
- 2145 – New Zealand Q3 Employment/Wages