The G-10 rundown
USD – Powell has a tough task to deliver in sufficient size on Friday to hold the USD back. Interesting to note that Trump’s panicky pressure in all directions doing nothing to hold back the greenback either. USD breaking up significantly and/or new local lows in US equities would likely usher in a between meeting 50 basis point cut.
EUR – high stakes for the EU’s leadership as European banks are in a death spiral – the ECB will have to bring out the big bazooka at the September 5 meeting. G7 may offer hints on the temperature of US-EU relations as well. If USD breaks higher versus EUR, we should shield our eyes for Trump policy mobilization against the EU on the trade front.
JPY – yen holding well here and prospects for a broad rally reinvigorated by EM weakness and any return of broader risk off. CADJPY downside an interesting way to express JPY strength.
GBP – Boris wants the Irish backstop abandoned and sterling will have a hard time finding support until/unless the EU gives way.
CHF – consolidation was hardly worth writing home about – EURCHF looks heavy for plumbing further depths until the EU gets ahead on the policy front and Brexit damage is averted. SNB’s intervention gathering pace as per yesterday’s weekly sight deposit data (nearly CHF 4 billion)
AUD – the RBA minutes mildly supportive, as the RBA hopes that infrastructure spending, easing in the bag and tax cuts will offset downside risk to the economy. But at the same time, the RBA clearly ready to swing into gear with QE if the Aussie economy falters.
CAD – note USDCAD chart above – key here for whether CAD plays some downside catch-up are the next couple of Canadian data releases.
NZD – AUDNZD trade creeping and crawling higher – supported by RBA minutes. NZDUSD looking heavy toward those multi-year lows.
SEK and NOK – the NOK putting in a modicum of strength here (but vulnerable again if risk appetite rolls over), while SEK suffering with the EUR and negative yields.
Upcoming Economic Calendar Highlights (all times GMT)
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