The G-10 rundown
USD – the US dollar is not playing ball with the bears here – a further leg higher of about 0.5% depending on the cross suggests we are shifting back to the perma-limbo that plagued much of 2019. A better status check on the greenback on the weekly close and the other side of the US jobs numbers this Friday.
EUR – as the market bounces back from geopolitical concerns, the euro fails to shine. Some have argued that the euro has become the funding currency of choice, will be watching how the single currency correlates with further bouts of risk-off this year to test that hypothesis.
JPY – as markets recoil from the geopolitically inspired risk-off move, the JPY weakens quickly – a bit more upside in yields and general risk appetite and USDJPY likely to reverse the recent sell-off and interesting as well to note the classic risk barometer AUDJPY failing yet to take out the 200-day moving average.
GBP – sterling firming a bit after yesterday’s December UK Services PMI impressively rebounded to just above 50 despite all of the supposed Brexit uncertainty and UK general election. Parliament sitting today and will set the course for a formal withdrawal from the EU at the end of this month, while March 11 has been set as the date for delivery of the next budget.
CHF – the franc marching to the beat of its own drummer as the relief from risk-off trades not see here and EURCHF remains heavy near the cycle lows.
AUD – the AUDUSD struggling in the last zone of support and right on the 200-day moving average this morning. The pair needs to find a bid sooner rather than later to argue for .
CAD – CAD is looking overambitious here as oil prices have pulled back, let’s see if the market treachery that was ever present in 2019 and looks to be hitting the AUDUSD bulls also strikes here for recent USDCAD sellers..
NZD – the longer term upside prospects for AUDNZD we mentioned yesterday have turned into downside tactical price action, though AU-NZ 2-year rate spreads are over 10 basis points off the lows. Would expect RBNZ to be on the warpath below 1.0300 if the selling continues.
SEK – we like EURSEK lower as long as the price action remains below 10.60/65, but patience may be required as we need stronger fundamental story to see more conviction in SEK longs – especially a change in the fiscal outlook for Sweden.
NOK – EURNOK able to press lower despite the recoil in oil prices as risk appetite rebounds, but the pair is looking a bit oversold without fresh catalysts.
Upcoming Economic Calendar Highlights (all times GMT)
- 1330 – US Nov. Trade Balance
- 1330 – Canada Nov. Trade Balance
- 1500 – US Dec. ISM Non-manufacturing
- 1500 – Canada Dec. Ivey PMI
- 1600 – New Zealand Dec. QV House Prices
- 0030 – Australia Nov. Building Approvals