Today’s G-10 rundown
USD – the US dollar looks inert – a safe haven from the riskier currencies, but potentially weak against the JPY and even the euro in the event the sell-off deepens. Long US treasury yields collapsing eroding the real interest rate advantage of the USD rather quickly here.
EUR – the euro picking up resilience in risk off conditions and despite locus of new coronavirus outbreak in Italy suggests the single currency could find support here on unwinding of carry trades. Still, some wood to chop to dig EURUSD out of the ditch (yes – mixing metaphors!).
JPY – the market is beginning to price in Bank of Japan rate cuts on the latest action and we suspect it is only a question of time until the Summer Olympics are canceled or delayed a year or similar. The December 2020 EuroYen STIR futures are pricing in 4.5 bps of easing.
GBP – the market unwilling to take a position on sterling here with distractions elsewhere and as we await signals on the UK budget next month.
CHF – EURCHF rejected the new lo for the cycle yesterday – is the 1.0600 level the SNB’s latest line in the sand?
AUD – somehow, iron ore prices are near the top of the range for the last year and offering a fundamental support, though shipments must have slowed sharply – meanwhile, private sector credit growth has been on a slide since earl 2016 and Australia is looking at a recession this year versus RBA hopes for 2% or higher growth….
CAD – looking for USDCAD to play a bit of upside catchup on further negative US data points and weaker Canadian oil prices. The BoC’s Lane is out speaking later today.
NZD – the RBNZ will need to cut rates and has at least 50 bps to cut before having to wrestle with talk of zero bound.
SEK – the SEK hanging in there rather well relative to the backdrop of weak risk appetite – key for SEK hopefuls is that price action remains south of 10.60-65
NOK – there is no lid for EURNOK if get another wave of price action like yesterday, or worse.
Upcoming Economic Calendar Highlights (all times GMT)
- 1300 – Hungary Deposit Rate
- 1400 – US Dec. S&P CoreLogic Home Prices
- 1500 – US Feb. Consumer Confidence
- 1500 – US Feb. Richmond Fed Manufacturing
- 1730 – Canada Bank of Canada’s Lane to Speak
- 2000 – US Fed’s Clarida (Voter) to Speak