Today’s G-10 rundown
USD – the Fed and Trump administration will eventually get this USD broadly weaker – looking for signs that it is working and the crush lower in rate spreads helps as Fed if force-marching to zero.
EUR – the euro staying relatively firm here as EURUSD deals with the major 1.1200 resistance that was in play yesterday. One bit of fundamental support is that the ECB has no real bullets left – further negative rates are no help and fiscal is the only answer, the risk being that EU officials prove painfully slow to act on the fiscal front.
JPY – the backdrop about as supportive as possible for JPY since yesterday – not terribly impressed with the action overnight and hence the profit-taking in our USDJPY short.
GBP – sterling rather offered again this morning, perhaps as the market sees the window for the BoE to reduce rates, since it does have a modicum of policy room to work with compared to the ECB. Technically watching the 200-day moving averages in both EURGBP and GBPUSD. Still like EURGBP lower eventually, with little visibility in short term. Maybe a level to establish optionality (long GBP) here.
CHF – EURCHF consolidated back as high as 1.0700. Downtrend feels tired after no major pickup in volatility over the market’s recent wild gyrations.
AUD – see the AUD chart above – if markets calm a bit here, it is fairly easy to string together a positive tactical narrative for AUD.
CAD – the Bank of Canada very likely to chop by fifty basis points today and wax very cautious on the impact from the coronavirus (also in Canada) and plunge in oil prices. May under-perform in the crosses, but if broader sentiments are lifted – USDCAD bulls looking in tactical trouble if USDCAD heads below 1.3300.
NZD – would expect AUD to outperform NZD in an attempt by markets to stabilize here, especially if the China sentiment continues to improve.
SEK – EURSEK looking lower again – but needs a bit of a comeback in global markets and fiscal news to shape up for a major attack through 10.50 to 10.40 in EURSEK
NOK – the krone needs a bullish reversal in crude oil and for global growth fears to fade to push the price action back lower through 10.25-20. Until then, NOK twisting in the breeze.
Upcoming Economic Calendar Highlights (all times GMT)
- 0930 – UK Feb. Final Services PMI
- 1315 – US Feb. ADP Employment Change
- 1445 – US Feb. Final Markit Services PMI
- 1500 – Canada Bank of Canada Rate Decision
- 1500 – US Feb. ISM Non-manufacturing
- 1900 – US Fed Beige Book