The G-10 rundown
USD – EURUSD is the missing piece for a broader USD sell-off as we continue to eye the 1.1500 zone for further potential. Elsewhere, USD struggling against risk-correlated currencies, but the move is pausing a bit here, perhaps as the market second guesses how far it has run with Fed expectations in the wake of Powell’s comments on Friday.
EUR – euro traders are perhaps reluctant to make a statement as long as Brexit issue remains out there as a risk for the EU economy. This could see the EURUSD chart continuing to drag around without conviction.
JPY – follow up rally in yen requires the return of fear and loathing to asset markets. Until then, keeping an eye on the 125.00-50 area in EURJPY for whether the sell-off remains viable and perhaps 110.00 in USDJPY for the same.
GBP – the market is unwilling to react to the latest batch of headlines – earliest we can expect any real movement in sterling perhaps in days after January 15 parliamentary votes as next steps for Brexit emerge.
CHF – eyeing the 1.1200 area in EURCHF as the technical area of interest for whether CHF worth paying attention to. Meanwhile, CHF downside likely needs clarity on Brexit.
AUD – AUD rally stumbling overnight on weak building approvals data, but China’s renminbi at new local highs versus the USD and a strong rally in Asian equities is making it tough for the currency to stay down. Squeeze risk continues if markets remain in positive stance.
CAD – as noted above, the CAD rally is the market neutralising the downside from the prior BoC meeting and fed by oil and risk rallies. The Bank of Canada will be very slow to change its now thoroughly neutral stance after the huge oil price shock of recent months.
NZD – the kiwi isoutpacing the Aussie’s gains again – but AUD is potentially more reactive to good news on US-China trade war détente – watching 1.0550-75 area as a pivot zone.
SEK – SEK is in a holding pattern and rather disappointing for bullish hopefuls that yesterday’s EURSEK sell-off didn’t stick – volatility has yet to pick up again and Riksbank minutes this morning not adding much to the mix.
NOK – EURNOK stuck in neutral in the key 9.75-80 pivot zone, needing a further rise in oil prices and a rally in asset markets, most likely, to power lower into the range between 9.45-75. Upcoming Economic Calendar Highlights (all times GMT)
1000 – Eurozone Nov. Unemployment Rate
1315 – Canada Dec. Housing Starts
1320 – US Fed’s Bostic (Non-voter) to speak
1400 – US Fed’s Evans (Voter) to speak
1500 – Canada Bank of Canada Announcement
1530 – US Weekly Crude Oil Inventories
1630 – US Fed’s Rosengren (Voter) to speak
1800 – US 10-year Treasury Auction
1800 – FOMC Minutes