The G-10 rundown
EUR – the FT ran a story (paywall) discussing an early draft of Italy’s populist parties’ platform for the upcoming government, which included a mechanism for leaving the EU and a request that the ECB write off EUR 250 billion of Italian sovereign debt. The euro may continue to broadly underperform here – even against sterling. As some have pointed out – the irony here is that without Italy, the euro should be much stronger….
JPY – the yen is not in a good place as the US yield advantage yawns wider and USDJPY busts up above 110.00. Weak risk appetite could provide a slightly offsetting support in the crosses.
GBP – sterling is escaping additional negative attention at the moment despite an ugly spike in Apr. Jobless Claims printed yesterday. The 1.3500 area in GBPUSD is trying to hang in there and the euro has come under more isolated pressure recently. EURGBP looks heavy if the 0.8750-25 area gives way here.
CHF – the EURCHF rally thoroughly derailed by this latest downdraft until proven otherwise and the technical case for bears picks up momentum if the 1.1800 area falls, which could point to a test of the 200-day moving average around 1.1650.
AUD – the Aussie is back near the lows for the cycle against the US dollar, as we watch for Australia’s employment data overnight for whether its relative performance improves or worsens. The shorter Australian rates have picked up sharply over the last couple of sessions and the stocks of the mining giants in Ausralia have pulled to multi-year highs.
CAD – a sharp spike higher in USDCAD yesterday in sympathy with the USD pairs elsewhere, but the strong oil price seems to providing considerable support for CAD in relative terms – and have a look at the EURCAD chart for a sense of the relative performance as Canadian rates have tracked US rates higher recently.
NZD – AUDNZD is contending with the 200-day moving average near the highs of the last couple of sessions and could risk a setback if Australia’s jobs data tonight comes in weaker than expected.
SEK – the weight of the weaker euro weighing perhaps on EURSEK, but this morning we even have a Riksbank member suggesting that the path to a rate hike in October is open.
NOK – the NOK performance against a struggling euro and despite strong oil prices of late can only be described as pathetic. The move above 9.60 disappoints the EURNOK bears.
Upcoming Economic Calendar Highlights (all times GMT)
0900 – Eurozone Final Apr. CPI
1200 – ECB’s Draghi to speak
1230 – Canada Mar. Manufacturing Sales
1230 – US Fed’s Bostic (Voter) to speak
1230 – ECB’s Coeure to speak
1230 – US Apr. Housing Starts / Building Permits
1315 – US Apr. Industrial Production
1430 – ECB’s Praet to speak
1430 – US Weekly US DoE Crude Oil / Product Inventories
1600 – Switzerland SNB’s Jordan to speak
2130 – US Fed’s Bullard (non Voter) to speak