The G10 rundown
USD – the greenback is largely back on the defensive, but there is no pulse at the moment as we await the US-China trade deal outcome and the next rounds of incoming data that will excite interest in policymakers’ reactions.
EUR – EURUSD makes a half-hearted effort at 1.1400, but there is plenty of heavy lifting to do in clearing away the dark clouds over Europe to get the pair above the technically important 1.1500 again. Set and forget longer term options strategies for a directional view and still see risk of downside resolution.
JPY – the yen is nudging higher as risk appetite a bit more defensive and sovereign bonds well bid – we like JPY cross shorts and USDJPY tactical as a play on further consolidation in risk appetite after the miracle rally of the last couple of months.
GBP – resurgence here is built on fairly solid foundation of confidence that No Deal is off the table and we could finally get some directional persistence and repricing of sterling.
CHF – surprised we haven’t seen a bit more pointed weakness in the franc on the latest Brexit developments and sterling surge. Watching GBPCHF as well as EURCHF on this.
AUD – the Aussie stuck in neutral, getting some support from CNY staying near the top of the range versus the USD, but iron ore prices have eased significantly and housing bubble unwind concerns remain the chief concern. The big banks stocks in Australia aren’t under immediate pressure, but are a good proxy for the risk that something more systemic may be afoot.
CAD – has pulled back higher versus the USD and that USDCAD chart is a churning mess. Zooming out a bit, important for an upside view there that the 1.3000 area provides support, and more helpful still if recent lows remain intact. Canada’s latest CPI data up this afternoon.
NZD – the kiwi pushing on resistance versus the USD while AUDNZD is bogged down after teasing support as NZ dipped into a much larger trade deficit in January than expected. In the background, the risk of Reserve Bank of New Zealand cuts on new bank capital requirements in New Zealand has further curtailed the NZD upside potential.
SEK – watching this morning’s January household lending survey with interest as it has been sliding aggressively and Sweden may be headed for recession in line with the EU. The Q4 GDP estimate is up tomorrow.
NOK – the EURNOK chart structure argues for downside focus, but we’ve been bottled up in a narrow range for over two weeks. A close below 9.71 could start to break the logjam, although 9.65 the bigger level. Upcoming Economic Calendar Highlights (all times GMT)
0800 – Sweden Feb. Confidence Surveys
0830 – Sweden Jan. Household Lending
0830 – ECB’s Coeure to speak
1000 – Euro Zone Feb. Confidence Surveys
1330 – Canada Jan. CPI
1500 – US Dec. Factory Orders
1500 – US Jan. Pending Home Sales