The G10 rundown
USD – the US dollar is trading firmer across the board outside of USDJPY, where the yen is likely to outperform on any notable further shift lower in risk appetite. Watch out for Fed’s Williams (voter) out speaking today.
EUR – the February Eurozone services PMIs were revised slightly higher from the preliminary estimates, but this isn’t enough to lift sentiment for the single currency and the ECB not likely to inspire confidence either, as the next policy moves of any impact (i.e., not TLTROs etc.) will have to come from the fiscal side.
JPY – interesting to note the lack of a response in treasuries to a very strong US data point yesterday – helping the yen to continue to firm. Further risk off on signs of momentum finally rolling over in risky assets could add a bit more fuel for further JPY consolidation.
GBP – sterling was volatile yesterday both on concern that the EU’s chief Brexit negotiator Michel Barnier would not offer any alterations to the EU’s stance but also on remarks by the UK Attorney General, Geoffrey Cox, that there is still hope for a breakthrough.
CHF – USDCHF came to life and posted its highest close in two weeks yesterday – further upside is contingent on a strong USD. EURCHF is thoroughly rangebound ahead of ECB – watching for reactivity there.
AUD – weak GDP print overnight adds to the downside risk, though we still trade within the range in the key AUDUSD pair and China’s CNY floor makes the outlook for a break lower more challenging. Still see pressure to downside until proven otherwise.
CAD – a potentially important Bank of Canada meeting today if it raises its level of concern in line with the steady decline in rate expectations. The market is actually more aggressively positioning for the first rate cut from the Fed than from the BoC (no easing yet priced). USDCAD trading at important resistance around 1.3375.
NZD – weak AUD data powering a bit of AUDNZD downside, and we watch for a possible new low close for the cycle today as the market prices the RBA to lead and exceed the Reserve Bank of New Zealand in pivoting toward providing more policy accommodation.
SEK – EURSEK rejected the test of the recent cycle highs above 9.60 – providing a technical hook for bears looking to get involved for consolidation well back into the range. Keep in mind the krona’s historically weak in real effective exchange rate (REER) terms.
NOK – looking for that confirmation that we have yet to see after the large bearish reversal in EURNOK that unfolded over year-end and into January. Let’s have a look at how the market treats the ECB meeting tomorrow. Risk appetite and oil prices more important in other NOK pairs. Upcoming Economic Calendar Highlights (all times GMT)
11:15 – US Feb. ADP Employment Change
13:30 – Canada Dec. International Merchandise Trade
13:30 – US Dec. Trade Balance
15:00 – Canada Bank of Canada Rate Decision
15:00 – Canada Feb. Ivey PMI
15:30 – US DoE Weekly Crude Oil / Product Inventories
17:00 – US Fed’s Williams (Voter) to speak
19:00 – US Fed Beige Book
00:30 – Australia Jan. Retail Sales