The G-10 rundown
USD – the US dollar is neutral to developments here it seems, offering low beta at the moment to risk-off impulses, but these have been so far too weak to judge the currency’s underlying reactivity to developments.
EUR – the euro under pressure ahead of an ECB where the market asks whether its policy review can come up with anything compelling – in short: doubtful, and green shoots of hope from something like the German ZEW survey reading need to see confirmation in tomorrow’s EU flash PMI’s for January.
JPY – the fresh concerns linked to the corona virus driving usual risk off patterns and we have the US 10-year treasury benchmark pressing below 1.75% this morning – helping the JPY stronger across the board – a deepening of these kinds of developments are the only readily apparent source of JPY volatility.
GBP – sterling ambitions curtailed by latest risk off patterns and USD and JPY firmness, though EURGBP looks heavy and is the most immediately technically compelling pair to track. Yesterday’s CBI survey release for Q1 posted a stunning rebound to +23 (highest since 2016 Brexit vote) vs. -20 expected and -44 in Q4.
CHF – the fresh spikes in concern on the corona virus feeding some safe haven seeking in CHF, but CHFJPY sell-off suggests JPY offers far higher beta to this theme.
AUD – the Aussie looking resilient here, but would prefer to trade that notion in crosses like AUDNZD and AUDCAD for now, while we watch whether this gentle rejection of new local lows in AUDUSD blossoms into something more.
CAD – the Bank of Canada dovish turn exceeded our expectations and the USDCAD has further confirmed the rejection of the late sell-off, pointing the needle back toward the top of the old range on further deterioration in Canada fundamentals and/or accelerating weakness in crude oil.
NZD – an important data release tonight in the form of Q4 CPI, which will test the important AUDNZD pair (confirmation that upside is side of least resistance) and the status of NZDUSD and the pivot area south off : In general we are biased for a weaker NZD.
SEK – watching reactivity to ECB today and EU data, which needs to pick up further in addition to fiscal signals in Sweden to drive more notable SEK rally.
NOK – little reaction to Norges Bank this morning, where the statement expresses belief in receding risks in the global growth backdrop while noting signs of a slowing Norwegian economy. Crude oil prices correcting lower no help either. EURNOK is bumping up against the pivotal 10.00 area – needs to maintain below to keep a constructive view on NOK
Today’s Economic Calendar Highlights (all times GMT)
- 1245 – ECB Meeting
- 1330 – ECB President Lagarde Press Conference
- 1330 – US Weekly Initial Jobless Claims
- 1530 – US Weekly Natural Gas Storage
- 1600 – US DoE Crude Oil and Product Inventories
- 2145 – New Zealand Q4 CPI