The G-10 rundown
USD – the market doesn't find the semi-nervous asset markets and calm bond markets to be strong catalysts for doing anything with the USD. Even the fact of a new Fed Chairman and next week's FOMC meeting seems unable to build anticipation as the Fed is seen on a preset course for the immediate future (rate hike virtually 100% next week) with a slow burn wait for incoming data to determine the path from then.
EUR – again, the policy convergence story a difficult one for supporting the euro when the market is already long, the European Central Bank's Mario Draghi is as cautious as possible, economic data surprises are rapidly mean-reverting, and the Italian election sets the old existential clock ticking.
JPY – the yen thrived late yesterday on generally weak risk appetite and lower bond yields, but volatility is low and USDJPY is still gyrating within the recent range. EURJPY a bit more technically compelling for downside focus if the euro remains in limbo here.
GBP – sterling is maintaining decent form, at least in part on the suffering euro, but also as Bank of England expectations haven't suffered despite the negative Brexit cloud hanging over the currency. The Bank of England meeting next week is the next major catalyst, while we watch whether EURGBP can explore the rest of the range to the downside in the meantime toward 0.8700 and/or whether 1.4000 can be taken out in GBPUSD.
CHF – EURCHF is caught in an extraordinarily tight range ahead of today's Swiss National Bank meeting, where expectations for drama are entirely absent.
AUD – the undeserved AUD rally found resistance overnight. We have very loud and strong long-term concerns for Australia, especially in relative terms (AUDCAD!) if the trade wars theme deepens. We also note the headline overnight "PIMCO sells Australia banks, property bonds as risks climb".
CAD – weakness on the trade protectionism theme of late and on dovishness from Bank of Canada governor Poloz in a recent speech. That dovishness could impress further if BoC rate expectations would actually decline a bit, which they have oddly hardly done over the last two months.
NZD – a weaker than expected Q4 GDP seeing a weaker than expected response in the kiwi. What gives? NZD looks broadly vulnerable at these levels.
SEK – a decent consolidation in EURSEK and NOKSEK after yesterday's in-line Swedish CPI release, but it will take more to dramatically turn the tide.
NOK – as argued above, Norges bank needs to deliver to bring an extension of recent NOK strength and may do so.
Upcoming Economic Calendar Highlights (all times GMT)
• 0830 – Switzerland SNB Meeting
• 0830 – Sweden Feb. Unemployment Rate
• 0900 – Norway Deposit Rate Announcement
• 1230 – US Mar. Empire Manufacturing
• 1230 – US Weekly Initial Jobless Claims
• 1230 – US Mar. Philly Fed Survey
• 1300 – Canada Feb. Existing Home Sales
• 1400 – US Mar. NAHB Housing Market Index
• 1430 – US Weekly Natural Gas Storage