The G-10 rundown
USD – further risk-on without a notable rise in US yields is the goldilocks scenario for USD bears, but we have a hard time believing that current conditions can persist for long.
EUR – seems the euro is set to perform poorly indifferently under almost any scenario as the prospects for the ECB easing are returning. ECB minutes may reveal more on that front, and the market will closely watch the Thursday flash Euro Zone PMIs for February. As if that wasn’t enough, tariffs on European cars for the US market
are a risk.
JPY – what does a yen trader do with safe haven bond bid and super-strength risk appetite? Given our expectation that current market conditions can’t persist for long, we like exposure to JPY upside via options.
GBP – sterling easing back higher as the market edges the odds higher that the worst outcome for sterling will be a delay of Brexit if Parliament moves next week to take more control of the Brexit process in a an amendment vote to avoid a no-deal.
CHF – the idea of fresh ECB easing keeps EURCHF from moving higher on the back of stronger risk appetite, and USDCHF dips away from the range highs.
AUD – the risk-on vibe, led by a a parabolic ramping in Chinese mainland equities, is keeping the AUD certainly firmer than it would be otherwise. The AUDUSD focus is lower, though bears will find it uncomfortable if the price action backs up above 0.7200. RBA minutes up late tonight and jobs data up Thursday.
CAD – oil and risk appetite supportive of CAD, but the recent bullish reversal in USDCAD keeps technical focus higher for now – price action below 1.3150 there would begin to stress that view.
NZD – the kiwi priced for perfection – not sure where the catalyst is to spoil the picture as we watch whether AUDNZD can explore the last shreds of the longer-term range toward parity.
SEK – the market second guessed the Riksbank’s attempt to keep a (relatively) hawkish stance on its guidance last week, but strong risk appetite and an easy ECB keeping new highs in EURSEK at bay for now.
NOK – fresh strong highs in crude oil keeping a bid under NOK and EURNOK looks lower as long as the throwback rally to 9.84 is intact. Upcoming Economic Calendar Highlights (all times GMT)
00:30 – Australia RBA Minutes