The G-10 rundown
USD – the FOMC and the subsequent un-related risk off have taken Fed rate expectations to a new low, with two cuts now almost fully priced by year-end. But with the yield curve flattening as we discussed in this morning’s Market Call, the market suggests that the Fed is still behind the curve.
EUR – the euro fairly stable this morning – perhaps as a relative liquidity safe harbor as the riskiest currencies are under pressure. Will take heavy lifting to take EURUSD away from the downside focus – though the pair needs to take out the 1.1000 level resolutely on a daily close to signal a test of the lows.
JPY – the JPY rising on the risk off overnight, but seems to need constant pressure from lower bond yields to sustain a bid. Perhaps the most interesting test of the currency would be a risky asset sell-off that fails to see much of a bid in safe haven fixed income.
GBP – the BoE cut a toss-up – but far more likely from coronavirus situation than would have been the case otherwise. Could trigger a further setback for sterling here – watching 1.2900 area in GBPUSD next.
CHF – the franc catching a renewed bid overnight on the risk-off and if this re-intensifies could see EURCHF challenging the important sub-1.0650 lows from 2017.
AUD – as we note above, AUDUSD is running out of range to explore before poking to new lows since the financial crisis.
CAD – the USDCAD rally working its way into the upper reaches of the local range to 1.3300+ and could be set for a full pull to 1.3500 and more if we see a chunkier correction in risk appetite and with it, oil prices, together possibly with any weak Canadian data.
NZD – the kiwi rout picking up pace and NZDUSD challenging the 200-day moving average this morning -a break of which could set up a further unwind into the cycle lows, although the more interesting zone on the way up was around 0.6425-50.
SEK – EURSEK is up in its pivot zone between 10.60-65 and could be set for a squeeze back into the full range higher toward 10.90+ if we see widening fears for global growth from the coronavirus.
NOK – EURNOK challenging above the 61.8% retracement and beginning to break-up the “topping” formation that was in place until now if it can’t immediately back down here. Another ugly down leg in energy prices and we could risk a spike to new highs.
Today’s Economic Calendar Highlights (all times GMT)
- 1000 – Euro Zone Jan. Confidence Surveys
- 1200 – UK Bank of England Rate Decision
- 1200 – Mexico Q4 GDP
- 1230 – UK Bank of England Carney Presser
- 1300 – Germany Jan. Flash CPI
- 1330 – US Q4 GDP Estimate
- 1330 – US Initial Weekly Jobless Claims
- 1800 – ECB’s Weidmann to Speak
- 2015 – Canada Bank of Canada Beaudry
- 2100 – New Zealand Jan. ANZ Consumer Confidence
- 2330 – Japan Dec. Jobless Rate
- 2330 – Japan Dec. Retail Sales
- 2350 – Japan Dec. Industrial Production
- 0030 – Australia Dec. Private Sector Credit Growth