The G-10 rundown
USD – the USD looks down and could be soon out as levels are beginning to fall across the board as long as the market it comfortable that it is getting what it wants from the Fed in providing easing and liquidity.
EUR – incoming ECB president Lagarde is already out singling out Netherlands and Germany for doing more on the fiscal side and saying that negative rates are under review for both positive and negative effects. EURUSD pulling higher and threatening bigger chart levels, starting with 1.1210.
JPY – the Bank of Japan provided zero drama as the bank kept its current levels of stimulus unchanged and dropped the language on timing – supposedly a “lower for longer” guidance, but market shrugs this off. Rally at US long end supports USDJPY lower, but JPY indifferent to weak in other crosses on strong appetite.
CHF – perhaps the drop in yields keeping a lid on EURCHF, but interesting that Lagarde comments on fiscal and strong risk appetite haven’t done more to weaken the franc. Where is the pulse?
GBP – sterling is looking passive here to broader developments as the market will have several weeks now to watch the ups and downs in polls and consider the complexity of possible election outcomes for Johnson’s efforts to increase his mandate.
AUD – A very strong performer overnight on the reaction pattern to the FOMC and challenging big levels, as we discuss above. Longer term concerns linger once this bout of risk enthusiasm fades – note the private sector credit growth notched another multi-year low overnight at a meagre 2.7% YoY.
CAD – the loonie sitting out the USD bashing party as the Bank of Canada waxes dovish on concerns for the outlook, punching Canadian short yields sharply lower.
NZD – an even stronger performer than AUD overnight. A very interesting level coming up in NZDUSD that looks like the neckline of a well-organized head and shoulders formation.
SEK – EURSEK has turned back lower finally after testing important resistance into 10.80+ Last chance for the SEK bulls to get something going tactically here.
NOK – A classic momentum divergence setup in EURNOK as the latest highs come with lower momentum readings, encouraging bears further on a close below perhaps 10.20.
Upcoming Economic Calendar Highlights (all times GMT)
- 0930 – Poland Oct. CPI
- 1000 – Euro Zone Q3 GDP
- 1000 – Euro Zone Oct. Flash CPI
- 1000 – Euro Zone Sep. Unemployment Rate
- 1100 – Italy Q3 GDP
- 1230 – US Sep. PCE Inflation
- 1230 – US Weekly Initial Jobless Claims
- 1230 – Canada Aug. GDP
- 2100 – New Zealand ANZ Consumer Confidence
- 0145 – China Caixin Oct. Manufacturing PMI