Category Archives: Market News

Futuro del peso mexicano 22-6

  • USD/MXN opens NY 18.1825 dips slightly, trades 18.1575-18.19 in early NY
  • Oil (CLc1) +0.38% at 42.68 reverses some of Wed losses, Thurs high 42.90
  • Banxico +25bp exp’d this aft; MX 1st 1/2 mos inf 9AM  f/c 6.25 v 6.17 pvs
  • USD/MXN supt 18.1350 Thurs low, 18.0752 10-DMA, 18.0320 2nd daily pvt
  • Res 18.2230, 18.2786 21-DMA, 18.3135 Wed high
  • ST vol drifts a touch lower as spot calms;

Futuro del peso mexicano 22-6

Futuro del peso mexicano 12-6

USD/MXN open NY 18.20, trades 18.203-18.1750; o/n 18.21-18.1635

  • Pair dipped to new post-US elex low Fri (below 18.16) at 18.1125
  • Rally in oil keeps USD anchored by lows, Fed 25bp hike exp’d Wed
  • USD/MXN sup 18.1615 Mon low, 18.1125 Fri low, 18.0920 lwr 21-d Bolli
  • Res 18.2081 falling hrly cloud base, 18.2396 100-HMA, 18.2958 10-DMA
  • Stoch’s/RSI near o/s provides support

futuro del peso mexicano 12-6

 

FX Market Update 22-5

Market Briefs

• EUR/USD -0.18%, USD/JPY flat, GBP/USD -0.35%, EUR/GBP +0.17%
• DXY +0.15%, DAX -0.38%, FTSE +0.33, Gold flat
• Merkel says Euro is ‘too weak,’ makes German products cheaper
• In Israel, Trump says there is “rare opportunity” for peace
• Germany, France: low inflation, imbalances make euro zone vulnerable
• Japan Apr trade surplus (Yen) 481.7 bln vs f’cast 520.7 bln, last 614.7 bln
• Saudi energy minister due in Iraq to discuss extension to oil output cuts; Brent +0.75%
• China’s favored trade deal in focus at Asian meeting
• Germany, France: low inflation, imbalances make euro zone vulnerable
• Germany’s Schaeuble pushes back in Greece debt relief row

Looking Ahead – Economic Data (GMT)

12:30 Chicago Fed National Activity Index (Apr) (prev 0.08)

Looking Ahead – Events, Other Releases (GMT)

14:05 FRB Philadelphia’s Harker at Jefferson College commencement
14:30 FRB Minneapolis’s Kashkari welcome remarks at Opportunity and Inclusive Growth conf
15:45 FedTrade Operation 15-year Fannie Mae / Freddie Mac (max $525 mn)
23:30 Fed Gov Brainard at Opportunity and Inclusive Growth conf; Minneapolis, MN
• 25:10 FRB Chicago’s Evans text of remarks at OTC derivatives conf; Shanghai, China

Currency Summaries
EUR/USD

• EUR/USD a little lower on the day but still looking bullish
• Techs and momentum favour buyers with 1.1300 targets popular
• EUR longs grew roughly EUR 2bln to EUR 5bln:
• Interest rate markets move a little against EUR/USD bulls
• US rates rebounding slightly:
• Initial support @ hourly cloud base/100-HMA 1.1156 & 200-HMA 1.1134

USD/JPY

• USD/JPY geared up for fall after large strikes expire later
• 111.40-50 likely magnetic as 1bln worth of NY cut strikes set to expire here
• Japanese importers, others amongst buyers, pop to 111.61 post-Tokyo fix
• Recall 110.85 has been the lowest seen so far
• Decent supply remains clustered around 112.00
• Japan April trade surplus Y481.7 bln, Y520.7 bln eyed, surplus with US -4.2%
• Exports to US +2.6% y/y, China +14.8%, Asia +12.2%, all exports +7.5%
• All imports +15.1%, crude oil +10.8%, LNG +3.0% and thermal coal +8.7%

EUR/CHF

• EUR/CHF offered through Europe, plays 1.0915-1.0884
• EUR/CHF eyeing 1.0867 Thurs low & 61.8% Fibo of May rise once more
• 1.0929 capped the cross for 3 straight days last week (Wed-Fri)
• Swiss domestic sight deposits rise to 487.479bln w/e May 19 vs 484.541
• Total also up. Data suggests SNB fx activity
• CHF gained last wk after Trump concerns fueled demand for safe havens
• USD/CHF up near 0.2% but hovers close to Friday’s 0.9726 low
• Spot initially bid to 0.9765 but then lower to 0.9744
• Downside risk remains, Nov 9 election day low at 0.9550 is key support

GBP/USD

• Brexit uncertainty & UK election event risk are helping weigh on GBP
• Davis said Britain’s EU ‘no deal’ threat is genuine in Sunday Times interview
• Latest Survation & YouGov poll said Tory lead over Labour down to 9%
• Ladbrokes quotes 8/1 for hung parliament after June 8 vs 16/1 recently
• Cable fell to threaten 1.2964 during European am, 50% of 1.2888-1.3040
• EUR/GBP scaled fractionally fresh Q2 high of 0.8625 during European am

USD/CAD

• USD/CAD elicited fresh support pre-1.3500 during the European am
• 1.3508 = Asia low & European am low. 1.3509 was pre-weekend low
• CAD benefitting from higher oil prices: WTI at 1mth high near 51/barrel
• IMM net CAD short position 98,000 contracts in week to May 16
• USD/CAD threatened 1.38 earlier this month (May 5)
• Bank of Canada meets this week (Wednesday)

AUD/USD

• AUD/USD met fresh headwind near 0.7470 during the European am
• 0.7470 was Friday’s 16-day high (0.7468 was May 18 high)
• More offers are tipped at 0.75. Dalian iron ore closed up 4.2% Monday

NZD/USD

• NZD/USD extended north to 0.6958 (19-day high) in early European trade
• Kiwi benefitting from prospect of Fonterra & NZ budget event risks
• Prospect of higher milk price forecast from Fonterra Wednesday
• Joyce set to unveil a higher than expected NZ budget surplus on Thursday
• 0.70 among NZD/USD resistance levels beyond 0.6969 (May 3 high)

FX OPTIONS

• OPEC Friday props gamma in related vols – CAD also gets BoC Wed
• 1 week expiry falls on US/UK holiday to add weight to vols there today
• Risk recovers since last week and vols under broader pressure – JPY leads
• EUR/USD vol setbacks minimal so far – fair value vs realised
• Next major focus after June NFP is ECB and FOMC

COMMENT

USD/JPY bulls may be in for another lurch lower

USD/JPY bulls should brace themselves for a potential squeeze lower, especially if there’s a fresh bout of risk aversion. Recall the market registered a close on Friday back below the 111.39 weekly cloud top, weakening the underlying position of USD/JPY bulls sitting on a vulnerable oversized position. Risk is growing for an extension of losses through last week’s 110.24 low to retest 110.00, below which a plethora of stops will be vulnerable. The large bet against yen has haunted bears since Tuesday, when IMM data showed a sharp increase in net yen shorts just before a decisive shift lower in USD/JPY Wednesday. Short IMM contracts rose from 36,307 to 60,008, the highest yen short position since the end of March which is the equivalent of long cash position in USD/JPY worth 6.5 yards of dollars. USD/JPY bulls (need to regain?) the daily cloud top at 111.82 for firmer foothold this week.

CHART

AUD/USD fall set to resume

Downside AUD/USD risk has returned and the rejection from close to the 30-DMA could see a fall to the lower 30-DMA Bollinger at 0.7336, not far from the May 9 0.7329 base. May’s recovery ran into trouble on Friday close to the daily Kijun at 0.7471 and the 30-DMA at 0.7473. The rejection is likely to trigger a retracement of May’s 0.7329 to 0.7470 rise. The 38.2%, 50% and 61.8% Fibos are at 0.7416, 0.74 and 0.7383, respectively. The high on Friday was 0.7470 and the slow stochastic has peaked at overbought levels which also suggests the next move is lower. Selling at current levels is favored for at least a return to the aforementioned 61.8% Fibo at 0.7383. A break there opens the path to a full retracement to May’s low

FX Market Update 19-5

Market Briefs

• Potential worst week in 9-mths for the USD
• EUR/USD +0.56%, USD/JPY flat, GBP/USD +0.57%, EUR/GBP flat
• DXY -0.43%, DAX +0.34%, FTSE +0.51, Copper +0.65%
• Seeking a new narrative, Trump embarks on trip to Middle East
• Long queues as Iranians start voting in presidential election
• Euro zone current account surplus eases from record high
• EZ Mar Current account NSA 44.8b vs revsd 27.8b prev 27.9b
• EZ Mar Current account SA 34.1b vs revsd 37.8b prev 37.9b
• OPEC panel looking at deepening, extending oil cuts – sources; Brent +1.12%
• DE Apr Producer prices yy 3.4% vs prev 3.1%
• UK PM May’s Conservatives set to outspend Labour in election battle
• TPP trade deal members seek to move ahead without US
• Japan’s April exports seen up for 5th straight mth; +7.8 pct yr/yr vs +12.0 in March
• Gold on track for biggest weekly gain in five; Gold +0.49%

Looking Ahead – Economic Data (GMT)

17:00 Baker-Hughes Rig Count (weekly)

Looking Ahead – Events, Other Releases (GMT)

13:15 FRB St. Louis’s Bullard (non-voter, dove) on the economy and monetary policy
15:45 FedTrade Operation 30-year Ginne Mae (max $975 mn)

Currency Summaries
EUR/USD

Thursday pullback looking corrective as EUR takes off topside again
• Trading 1.1164 session high into New York from 1.1097 low
Thursday 1.1174 high initial res. But market has a 1.12+ feel about it
• Passing of Greek bailout measures latest in line of EUR positives
• Bond markets paint a very favourable picture for the EUR
• EUR 3.3bln expiries 1.1100-20 may prove magnetic later

USD/JPY

• USD/JPY recovery continues, with the envelope pushed to 111.70 from 111.12
• Tech bulls have taken cue from long tail on Thur’s candlestick
• Expect solid resistance around 112.00. Note cloud top is @112.03
• Some stops likely to have clustered above 112.05 – 50% 113.85 to 110.24 fall
• UST-JGB spread widens across curve which is underpinning USD/JPY
• Fading recovery moves ahead of 112.00 a favourable strategy
• Any further Trump woes would put USD/JPY recovery in jeopardy

EUR/CHF

• Dollar respite was short lived and USD/CHF is offered again
• 0.9804-0.9769 Europe. Could threaten 0.9759 Thurs trend low
• Tight 1.0892-1.0906 EUR/CHF range in Europe. Recovery fm Thurs 1.0867 low
• Thurs low was a 61.8% retrace of May rise, break under remains likely
• Below risks full retracement to May 3 1.0793 low & 200-day MA at 1.0783
• Hourly cloud, 1.0912/1.0924 & falling 100-HMA at 1.0920 resistance Fri
• CHF benefits from safe haven demand fueled by U.S political turmoil

GBP/USD

• GBP recouped remainder of Thursday’s ‘flash slip’ losses during European am
• 1.3011 = European am high to follow 1.2959 Asia high
• Stops below 1.2980 were tripped en route to 1.2888 low at 1735GMT Thursday
• 1.3048 = Thursday’s 8mth high after UK retail sales beat, before ‘flash slip’
• Option barrier mooted at 1.3050, with 1.35 among bull targets beyond
• Citigroup says Tories to win majority of 104-190 seats in June 8 election

USD/CAD

• USD/CAD slid to 1.3566 (3wk low) during European am as WTI rose to 50.07
• 50.07 bucks/barrel = 3wk high, on expectations of oil output cut extension
• 1.3671 was USD/CAD high Thursday, when WTI near 48 bucks/barrel
• Bids around 1.3576 based USD/CAD losses TuesdayWednesday
• 1.3576 = 38.2% of 1.3224-1.3793. Canada CPI/retail sales data due 1230GMT
• Apr CPI f/c +1.7% y/y, core CPI f/c +1.4% y/y. Mar retail sales f/c +0.4%

AUD/USD

• AUD met headwind at 0.7470 after extending north from 0.7407 (Asia low)
• Offers just shy of 0.7470 capped AUD/USD rise from 0.7409 Thursday
• Dalian iron ore closed up 3.2% Friday, source of support for AUD
• More AUD/USD offers tipped at 0.75 (AUD/USD sub-0.75 since May 3)

NZD/USD

• NZD/USD scaled intra-day peak of 0.6907 as AUD/USD rose to 0.7470
• Simultaneous AUD/NZD rise to 1.0820 (23-day high). 1.0787 = Asia high
• AUD/NZD traded as low as 1.0695 Thursday, before Aussie jobs data

FX OPTIONS

• Risk sentiment recovers for now, vols give back some of the mid week gains
• USD/JPY vols rose the most so fall hardest, still above lows however
• 1mth USD/JPY risk reversals much slower to ease, suggests market still wary
• EUR/USD vol setbacks stall as spot pushes higher, EUR call bias peaks
• AUD buyers 1mth risk reversals from 8 year low AUD puts
• USD/CAD 1 week vol higher on BoC and OPEC capture.

COMMENT

GBP/USD looks toppy

GBP/USD looks toppy. Short-covering was the basis of the rally from 1.2110 in March to 1.3048 yesterday with traders seen too bearish. Few were actually bullish the pound but the price action suggests that many have got long. The first sign of longs was evident in the reaction to strong CPI data this week with GBP selling off when it should have rallied. Yesterday’s dump late in the NA session is another indication of a long, and perhaps overlong GBP position. GBP/USD dived from 1.3000 to 1.2888 in minutes. That was the move anticipated on the trigger of stops above 1.3000 barriers which instead resulted in hours of grinding, choppy, price action that failed to knockout more barriers at 1.3050. Aside a brief dip below the 21-DMA in April GBP/USD has been bullish above this line throughout the Mar/May correction. A close under the 21-DMA will likely prove too much for a market now long GBP for Brexit.

CHART

Euro bulls fight back versus yen

EUR/JPY bullish prospects have improved with the cross set for a retest of the recent 2017 125.81 high if it manages to register a daily close back above the tenkan line, currently 124.19. The cross left a long tail on Thursday’s candlestick line as EUR/JPY recovered after Wednesday’s bearish black candle. Bulls will already be encouraged by the failure to register a daily close below 123.23 on Thursday – 23.6% retrace of the 114.86 to 125.81 rise – and seem poised to capitalise on Friday’s gains. Both the tenkan and kijun lines are flat, indicating neutral momentum which bulls need to be mindful of. If the cross fails to register a daily close above the aforementioned tenkan line, this would be a setback for the bulls. A break below Thursday’s 122.57 low would put bears back in command

FX Market Update 18-5

Market Briefs

• EUR/USD -0.35%, USD/JPY -0.42%, GBP/USD +0.55%, EUR/GBP -0.88%
• DXY flat, DAX -1.06%, FTSE -1.46, Copper -1.9%
• UK shoppers shrug off inflation pressure; +2.3% vs revsd -1.2% prev -1.8%
• GB Apr Retail sales yy +4.0% vs revsd +2.0% prev 1.7%
• Trump campaign had at least 18 undisclosed contacts with Russians
• Bank of England’s growth and pay forecasts too optimistic-poll
• ECB to signal a move away from QE by Sept on better data-poll
• Japan’s economy expands at fastest pace in a year in Jan-March
• Support for Macron’s party grows before French parliamentary election-poll
• EU looks to build alternative to London for capital market – document
• Smaller cities keep China property market hot in April
• Greece needs to clear more hurdles before ECB bond buys: Coeure
• Oil down as market stays well supplied despite OPEC cuts; Brent -1.88%
• Mexico central bank seen holding key rate, pointing to future hikes

Looking Ahead – Economic Data (GMT)

12:30 Initial Jobless Claims (May 13 week) (prev 236k)
12:30 — Continued Claims (May 6 week) (prev 1.918 mn)
12:30 Philadelphia Fed Manufacturing Survey (May) (mkt +19.8, prev +22.0)
14:00 Leading Indicators (Apr) (mkt +0.4% m/m, prev +0.4% m/m)

Looking Ahead – Events, Other Releases (GMT)

15:45 FedTrade Operation 30-year Fannie Mae / Freddie Mac (max $1.625 bn)
17:15 FRB Cleveland’s Mester (non-voter, hawk) on the economy and monetary policy; Minneapolis, MN

Currency Summaries
EUR/USD

• EUR/USD 1.1174 in Asia hits 1.1107 low In Europe
• EUR/GBP selling behind initial pressure (UK data, cable 1.30 break)
• EUR/JPY then slammed 123.70-122.59 on latest US news
• Expect EUR/USD buyers between May 16 1.1097 high & May 17 1.1080 low
• Key supports @ May 8 high 1.1024, 100-HMA 1.1022 and 1.1000
• Rates have turned fav EUR/USD bounce: US/bund May 18

USD/JPY

• USD/JPY continues to drop, today falling from 111.24 to 110.31
• Narrower UST-JGB spread corresponds with weaker USD/JPY
• Spot has taken out the 110.52 Fibo
• 110.52 – 61.8% retrace of the 108.13 to 114.38 rise
• Bulls rout persists as Trump woes weigh on risk
• Stops, which were layered below 110.50, have been triggered
• Price action sets up test of 110.00
• Daily cloud, 111.14-112.12, weighs
• BoJ DepGov Iwata– Nothing on exit from policy, depends on rates at time
• EconMin Ishihara – Economy recovering but no clean escape from deflation
• Japan Q1 GDP +0.5% q/q, +2.2% AR, +0.4/+1.7% eyed
• MoF flow data May 13 week – Japanese good buyers of foreign bonds again
• MoF flow data – Foreign investors add to Japan portfolios

EUR/CHF

• Renewed CHF strength looks to test Wed’s 0.9774 6-mth high vs USD
• USD/CHF 0.9822-0.9783 Europe. Wed close under 61.8% of Trump rally 0.9853
• 76.4% Fibo is next support at 0.9737
• CHF has gained in recent days amid Trump concerns
• The slide in EUR/CHF Wed stopped bang on the 50% of May rise at 1.0890
• Speculation that the SNB remains active despite a softer CHF recently
• 1.0929-1.0893 today. 61.8% Fibo next level of support at 1.0867
• SNB to keep expansive monetary policy – Jordan in paper

GBP/USD

• Cable finally vaulted 1.30 after big UK retail sales data beat at 0830GMT
• UK retail sales +2.3% in Apr vs +1.0% consensus expectation
• 1.3046 = 8mth high for cable after stops above 1.3000 tripped
• 1.2987 was pre-data release high vs 1.2937 early Ldn low
• EUR/GBP down to 0.8541 courtesy of UK retail sales data beat
• 0.8530 is former resistance turned support, high after Macron 1st round win

USD/CAD

• 1.3650 offers capped USD/CAD after it vaulted 1.3641 (Wednesday’s high)
• Option-related interest suspected in mix: large 1.3650 expiry Friday
• USD 600mn strike. More offers tipped at 1.3660 (1.3659 = Tuesday’s high)
• 1.3619 (Asia top) is now support. Key support 1.3576, 38.2% of 1.3224-1.3793
• 1.3576 approximates to Tuesday/Wednesday low. 1.3582 = Asia low
• BoC meets next week (May 24), expected to keep key interest rate at 0.5%

AUD/USD

• AUD/USD retreated to 0.7433 during European am vs 0.7468 Asia 15-day top
• Retreat influenced by decline in risk appetite: S&P e-minis -0.14% 0915GMT
• S&P 500 closed -1.82% Wednesday. 0.7409 = Asia low, pre-Oz jobs data

NZD/USD

• NZD/USD retreat to 0.6915 influenced by a decline in risk appetite
• S&P e-minis -0.39% at 0948GMT. S&P 500 closed down 1.82% Wednesday
• 0.6952 = 1wk high for NZD/USD in Asia (0.6951 was last week’s high)

FX OPTIONS

• USD/JPY vols and risk reversals poised for deeper spot weakness
• EUR/USD vols peak with spot but remain well above recent/long term lows
• Cable gamma paid as expected when 1.30 barriers breached, vols propped
• AUD vols tick higher despite firmer spot – value levels at recent/2yr lows

COMMENT

GBP/USD through 1.30, next stop 1.35

The announcement of an early election last month helped Cable break through 1.2780/00 and, since then, a soft dollar environment and strong UK retail sales has helped the unit break above 1.30 where previously a move above this level had been thwarted by importer hedging related demand.
A move to 1.35 over the next 2-months seems likely now especially as EUR/USD has also managed to break firmly above 1.10. The dollar is softer against a large majority of both DM and EM currencies this year despite a Fed that surprised in March and likely to hike again in June. The backdrop of rate differentials has not helped dollar bulls and what we are still seeing is an unwinding of short dollar positions.
But it’s not just about the dollar, a reduction in bearishness toward the GBP (and EUR) has also been eroded due to optimism over a longer transition period (no election in 2020) and better eurozone data (especially the soft data). It seems likely that we could go back to the upper end of the 1.28-1.35 trading range that was seen last year following the June EU referendum and ahead of the October flash crash.
The pain trade currently is still in the direction of GBP shorts re-evaluating their bearish views. Selling from importers is likely to help make upside less of a one-way bet.

CHART

Weekly cloud top potential for cable

GBP/USD looks to be building for a test of the top of the weekly cloud at 1.3356 as it rises further into the cloud after breaking 1.300. A retracement of the 2016 May to October drop is underway. The 38.2% Fibo of that fall was broken at 1.2840 in April and long players are now targeting the next retracement level, the 50% Fibo, at 1.3257. Daily slow stochastics have risen from oversold levels and show room to run, the upper 30-day Bollinger is closer to the market resistance at 1.3165. Note that Bollinger bands historically contain price action so could see an adjustment lower ahead of a fresh run north. Those looking to enter long GBP trades should use any pullbacks as an opportunity to join the trend. The 10- and 21-DMAs are near-term supports at 1.2938 and 1.2902, respectively.

FX Market Update 17-5

Market Briefs

• EUR/USD +0.01%, USD/JPY -0.66%, GBP/USD +0.22%, EUR/GBP -0.15%
• DXY -0.08%, DAX -0.4%, FTSE flat, Copper -0.12%
• S.Korea’s Moon says “high possibility” of conflict with North as missile crisis builds
• Merkel’s conservatives extend lead over Social Democrats -poll
• GB Mar Avg wk earnings 3m yy +2.4% vs prev 2.3%, first pay squeeze since 2014
• GB Apr Claimant count unemp chng +19.4k vs revsd +33.5k prev 25.5k
• GB Mar ILO Unemployment rate 4.6% vs prev 4.7%
• BOJ’s Kuroda says told Abe will continue with ultra-easy policy
• JP Mar core machinery orders +1.4 % m/m vs prev 1.5%
• Oil dips on U.S. inventory build, defies OPEC-led cut efforts, Brent -0.06%
• Gold rises to two-week high amid Trump concerns, +0.75%
• EZ Apr Inflation final yy 1.9% vs prev 1.9%

Looking Ahead – Economic Data (GMT)

11:00 MBA Weekly Mortgage Application Indices
14:30 EIA Weekly Petroleum Status Report

Looking Ahead – Events, Other Releases (GMT)
13:45 FedTrade Operation 30-year Ginnie Mae (max $975 mn)
15:45 FedTrade Operation 15-year Fannie Mae / Freddie Mac (max $600 mn)

Currency Summaries
EUR/USD

• Good start for EUR/USD bulls as pair trades up to 1.1122
• Then swift pullback to 1.1080
• 1.1092-1.1122 rise took 13 hours, 1.1122-1.1080 nearer an hour
• Risk-off feel to broader trade centred on Trump supports dip buys
• EUR/USD buyers line up orders ahead 1.1000
• US rates ease in light of latest Trump shenanigans:
• Break 1.1129 61.8% 1.1616-1.0340 drop needed to inspire bulls

USD/JPY
• Trump political woes sees flows back into yen, concern over tax agenda rises
• USD/JPY has fallen from 113.13 to 112.26, before stabilising
• On the way down stops circa 112.70/112.80 were triggered
• Daily cloud, which spans 111.41-112.24, provides relief for USD/JPY bulls
• Expect a decent build up of bids around 112.00
• UST-JGB spread narrows, USD/JPY 30/60-day correlation high across curve
• Japan Mar core machinery orders +1.4% m/m, -0.7% y/y, +2.1% and +0.6% eyed

EUR/CHF
• CHF gained to 7-wk 0.9820 high vs USD amid Trump concerns
• U.S political uncertainty keeps USD under pressure, safe haven flows into CHF
• The rise in the franc broke below key USD/CHF Fibo support at 0.9853
• 0.9853 is the 61.8% Fibo of the Trump 0.9550-1.0343 rise
• A close below risks a full retracement to the Nov 9 0.9550 low
• EUR/CHF post French election rally to 1.0987 may have peaked
• Cross above 1.09 for now but retracement of 1.0793-1.0987 underway
• 38.2% Fibo pierced today. 50%/61.8% Fibos at 1.0890/1.0867

GBP/USD
• Something and nothing day for GBP traders
• GBP/USD near opening 1.2930 level within 1.2907-53 range
• Test of 1.3000 barriers proving elusive again
• EUR/GBP snaps back after trading to 0.8616 so over 200-DMA/daily cloud
• Real money selling turned the tables on those long, cross to 0.8563
• GBP/JPY down slightly today in line Trump concerns and soft stocks
• UK jobless up but U/R rate down, average earnings small downside miss

USD/CAD
• USD/CAD fell 1.3720-1.3601 Mon as oil rallied, based 1.3575 y/day
• Light crude now consolidiates middle of Mon’s 47.75-49.66 range
• Broader USD weakness keeps a lid on USD/CAD, 1.3580-1.3635 today
• 1.3575 is 38.2% of 1.3224-1.3793 and wkly cloud top, bears need close below
• Tues high 1.3659, 10DMA 1.3672 and Mon’s 1.3720 peak resistance levels

AUD/USD
• AUD/USD lower amid combination of AUD/JPY sales and EUR/AUD demand
• NYT report Trump/Comey/Flynn investigation fuelling risk aversion
• 0.7440-0.7391 so far today, stopped by alleged corp bids at 0.7390
• Mons 0.7386 low support before Fri 0.7369 low. 10dma is at 0.7394
• Dalian Iron ore gains and S&P reaffirmation of Aus AAA rating underpinned
• Mon’s 0.7446 recovery peak caps before 21dma 0.7453. Offers in 0.7440’s
• Expiries at both ends of range today – 0.7400 (462M), 0.7440 (502M)
• Implied vols AUD puts by recent/2.5yr lows – highlight lack of d/side fears

NZD/USD
• NZD/USD 0.6884-0.6928 in Asia but drops back to 0.6881 in London
• Sales of NZD/JPY adding weight in London – 77.81-34 so far
• Initial NZD/USD support Tues 0.6862 low, then Mon/Fri/Thur 0.6853/27/18
• AUD/NZD 1.0788-25 Asia/early London but recovers 1.0750 since

FX OPTIONS

• US political woes hurt USD and help fuel risk aversion/JPY gains, Vols up
• EUR/USD short topside covering boosts vols and EUR calls along the curve
• Low absolute levels fuelling demand as pair tests/breaches 1.11 barriers
• USD/JPY vols ramped up. AUD vols/puts still lack demand at 2.5yr lows
• GBP/USD 1mth 1.0 above Fri’s long term low. 1.30 barriers cap GBP


COMMENT

Sterling bulls running out of fuel

We continue to advocate picking a top ahead of 1.3000/1.3032 in GBP/USD as sterling bulls are running out of fuel. GBP/USD failed to tackle 1.3000 barriers on Tuesday on higher UK CPI, only reaching 1.2958 which is instructive of the sheer scale of supply above including 1.2990 which was the 2017 high posted on May 8. Trump woes which hit the dollar in Asia [nL2N1II0BO] again failed to lift GBP/USD close to the 1.3000 level. The March-May rise from 1.2110 to 1.2990 was fuelled, in part, by a squeeze on sterling shorts. As of last Tuesday, IMM speculative net short contracts fell to 46,798 from 81,364 the preceding week, meaning a further pursuit of shorts maybe less successful. If the market breaks 1.3000, it still has to regain the important 1.3032 Fibonacci level – 76.4% retrace of the 1.0520 to 2.1162 (1985 to 2007) rise – in order to exert further upward pressure

FX Market Update 16-5

Market Briefs

• EUR/USD +0.65%, USD/JPY -0.22%, GBP/USD -0.06%, EUR/GBP +0.76%
• DXY -0.36%, DAX -0.09%, FTSE +0.54%, Gold +0.35%, Copper -0.57%
• Euro hits six-month high, its highest level since Nov 9 2016 in Europe at 1.1049
• Kuroda says “quite sure” BOJ can smoothly withdraw stimulus
• JP PM: will continue to deploy fiscal monetary/structural steps for econ revival
• Oil rises on expectations of extended supply curbs; Brent +0.41%
• Euro zone expands trade surplus despite protectionist calls
• EZ Mar Eurostat Trade NSA 30.9b vs prev 17.8b
• EZ Q1 GDP Flash estimate qq 0.5% vs prev 0.5%
• EZ Q1 GDP Flash estimate yy 1.7% vs prev 1.7%
• German investor morale rises as economy “in good shape”
• DE May ZEW Economic sentiment 20.6 vs prev 19.5
• DE May ZEW Current conditions 83.9 vs prev 80.1
• UK inflation jumps more than expected in April to hit highest since 2013
• GB Apr Core CPI yy +2.4% vs prev 1.8%
• GB Apr CPI yy +2.7% vs prev 2.3%
• GB Apr RPI yy +3.5% vs prev 3.1%
• GB Apr PPI Core output yy NSA +2.8% vs prev 2.5%
• Norway Q1 mainland GDP 0.6% vs rvsd 0.4% prev, 0.5% exp
• Riksbank proposes switch to CPIF and +/- 1.0% around 2.0% inflation target

Looking Ahead – Economic Data (GMT)

12:30 Housing Starts (Apr) (mkt 1.260 mn, prev 1.215 mn)
12:30 — Building Permits (Apr) (mkt 1.270 mn, prev 1.267 mn)
12:55 Redbook Weekly Same-Store Sales Index
13:15 Industrial Production (Apr) (mkt +0.3% m/m, prev +0.5% m/m)
13:15 — Capacity Utilization (Apr) (mkt 76.3%, prev 76.1%)
13:15 — Factory Output (Apr) (mkt +0.3% m/m, prev -0.4% m/m)

Looking Ahead – Events, Other Releases (GMT)
18:30 FedTrade Operation 30-year Fannie Mae / Freddie Mac (max $1.625 bn)

Currency Summaries
EUR/USD

• Suggests 1.1050 barrier. Few vanilla options 1.11+:
• Buying mainly led by optimism for the EZ after favourable elections
• Rates markets are supporting EUR/USD too but with bonds lagging/tracking FX
• Germany’s ZEW missed a 22 f/c but at 20.6 in May is best since Aug 2015

USD/JPY

• 2.2 yards of 114.00 option strikes set to expire on Thurs which may draw
• There are said to be good sized offers towards 114.00
• Decent amount of bids near 113.00, 100-DMA props just below
• 30/60-day correlated UST-JGB yield spread across the curve
• Recent narrowing of yield spread has weighed on spot in recent days
• Reports Japanese players bought US Treasuries on yield uptick last week
• USD/JPY trades a modest 113.25-113.79 range so far this session
• EUR/JPY bias for 125.68 pivot point, then 126.00 beyond
• Cross cleared stops above 125.00, rising from 124.60 to 125.54

EUR/CHF

• USD/CHF pullback extends through 61.8% Fibo of May rise at 0.9954
• Broad based dollar weakness weighs. DXY -0.4% Tues, off 5% fm Jan peak
• Spot tests 0.9922 low, risk for full retracement to the May 5 0.9859 base
• Weekly cloud twist by 0.9870 helping pull price lower
• EUR/CHF stays steady, supported by EUR/USD rise above 1.10
• Cross lifts to 1.0958 then eases to 1.0941 ahead of NY
• Retracement risk remains. 38.2% Fibo of the May rise is at 1.0913

GBP/USD

• EUR/USD moves initially inspires GBP/USD buying
• Pair rises 30-40 pips from around 1.2900 in advance UK inflation data
• CPI highest since Sept 2013 @ 2.7% beating estimates
• GBP/USD 1.2958 on data release then surprisingly lower to 1.2875
• 21-DMA @ 1.2882 pivotal (close basis). Data move suggest traders long GBP
• 1.3000 barriers remain key above

USD/CAD

• Oil rallied strongly y/day after Saudi/Russia oil output cut talk, boosted CAD
• USD/CAD fell 1.3720-1.3601 Monday but recovers 1.3659 today
• Oil off its highs and CAD consolidates. Didn’t close below 21DMA 1.3623
• Focus remains OPEC 25-26 May – keeps bid under 2wk vol 7.5/160 pips
• 1mth vol 7.3 (6.1 to 7.45 spike after 1.3600-1.3790 rally late Apr/early May)

AUD/USD

• AUD 0.7406-35 in Asia. Resistance Mon 0.7446 peak, 21DMA 0.7461
• Highs seen after RBA mins, little changed from April. Lows after AUD/JPY sales
• Bids touted around 0.7400, dip to 0.7398 early London. Offers 0.7450
• China announcment one belt road project props commods/AUD [nL4N1IH4TW]
• Support may prove fleeting, AUD/commods could come back under pressure
• 10DMA 0.7393 initial support before Mon’s 0.7386/Fri’s 0.7369 lows
• Implied vols l/term lows, risk rev low end of post US election 2.0-0.6 AUD puts

NZD/USD

• Opened Asia at 0.6879, traded 0.6876/0.6906 range
• Some weight on commods early London – NZD 0.6865
• Risk trades undone as JPY demand renewed steering NZD/JPY cross lower o/n
• Speculation safe haven JPY bid linked to latest White House news [nL2N1IH1O9]
• Relative NZD outperformance vs AUD saw cross off 0.4% to 1.0747
• GDT auction perennial wildcard for kiwi & cross as WMP futures price lower


FX OPTIONS

• EUR short covering lifts vols/EUR calls as EUR gains today
• Huge 1.10 EUR/USD expiry Thursday a potential draw on setbacks
• 1mth vol gets ECB, FOMC, UK MPC to underpin related vols
• USD/JPY in a long gamma zone to cap vol demand there for now
• AUD/USD vols back near recent/2yr lows – potential value, AUD puts cheap

COMMENT

Riksbank proposals open up dovish/hawkish debate

Sweden’s c.bank has proposed the reintroduction of an inflation tolerance band and a move to core inflation (CPIF) from headline CPI, prompting questions whether the Riksbank is moving to a more dovish or hawkish bias. The difficulty of managing both inflation and inflation expectations has led to the new approach. Although the measures will likely reduce the need for further stimulus, there is also the view that the Riksbank will tolerate inflation moves below the 2.0% target by introducing the +/- tolerance band. The Riksbank’s main aim will be to anchor inflation expectations rather than change monetary policy. For, now the market has taken the proposals as dovish, pushing EUR/SEK to a five-month high of 9.7480. Link to Riksbank press release

CHART

Euro aims for 126.99 Fibo vs yen

Euro has managed to clear the 124.77 Fibonacci level – 38.2% retrace of the 149.79 to 109.30 (December 2014 to June 2016) fall – but needs to sustain this break until the end of May when it has a chance to register a critical monthly close above. Monday’s long white candlestick line adds to the underlying bullish market structure, increasing the odds that 126.99 – 76.4% retrace of the 132.45 to 109.30 fall – will be tested in coming sessions. Tenkan points north are reinforcing near-term positive momentum in the market. While longer-term 14-month momentum remains marginally negative, the chance is growing for this indicator to flip to positive readings for the first time since December 2014. A failure to register a monthly close above the 124.77 level will weigh on bulls in coming months

FX Market Update 12-5

Market Briefs

  • EUR/USD +0.1%, USD/JPY -0.2%, GBP/USD -0.2%, EUR/GBP +0.3%
  • DXY flat, DAX +0.1%, FTSE +0.2%, Gold +0.3%, Brent -0.2%
  • Dollar heads for strongest week this year on Fed hike bets – Rtrs
  • EZ Mar Ind production -0.1% m/m, 1.9% y/y vs prev -0.1%/+1.4% rvsd. 0.3%/2.3% f/c
  • DE AprCPI final 0.0% m/m, 2.0% y/y vs prev 0.0%/2.0%. 0.0%/2.0% f/c
  • DE Q1 GDP flash SA 0.6% q/q vs prev 0.4%. 0.6% f/c
  • Germany says will tell U.S. at G7 that the world needs its leadership – Rtrs
  • IMF, euro zone say need more time to reach Greek debt relief deal – Lagarde – Rtrs
  • NTERVIEW-Risks to euro zone economy still not balanced -ECB’s Lane – Rtrs
  • Austrian Foreign Minister Kurz calls for snap election – Rtrs
  • BOJ’s Kuroda: protectionism is no solution for fixing global inequality – Rtrs
  • BOJ board member Harada: QQE producing “excellent results” – Rtrs
  • Riksbank’s Jansson-still worried about fast and big strengthening in SEK

Looking Ahead – Economic Data (GMT)

  • 13:30  CPI (Apr) mkt +0.2% m/m, +2.3% y/y; prev -0.3% m/m, +2.4% y/y
  • 13:30  — CPI Core (Apr) mkt +0.2% m/m, +2.0% y/y; prev -0.1% m/m, +2.0% y/y
  • 13:30  Retail Sales (Apr) mkt +0.6% m/m, prev -0.2% m/m
  • 13:30  — Retail Sales ex-Autos (Apr) mkt +0.5% m/m, prev flat m/m
  • 13:30  — Retail Sales Control (Apr) mkt +0.4% m/m, prev +0.5% m/m
  • 15:00  Business Inventories (Mar) mkt +0.1% m/m, prev +0.3% m/m
  • 15:00  Michigan Sentiment (prelim May) mkt 97.0, prev 97.0
  • 18:00  Baker-Hughes Rig Count (weekly)


Looking Ahead – Events, Other Releases (GMT)

  • 14:00  FRB Chicago’s Evans on the economy; Dublin, Ireland
  • 16:45  FedTrade operation 30-year Fannie Mae/Freddie Mac (max $1.625 bn)
  • 17:30  FRB Philadelphia’s Harker on the economic outlook

Currency Summaries
EUR/USD

  • EUR 1.1024-1.0839 this week but only 1.0898-39 last 3 days
  • One-month EUR/USD vol close to 2017 low:
  • VIX bounces but close long-term lows:
  • Stocks at record highs are around the globe:
  • Unwind EUR shorts over & EUR/USD at upper-end 2017 range 1.1020-1.0340
  • EUR is a prudent choice for anyone looking to fund a carry trade

USD/JPY

  • USD/JPY range has been 113.55-113.95
  • Offers are in place above 114.00, some are option-related
  • Option mkt seeing buyers of very short dated USD/JPY d-side
  • Found support @113.45 when market dropped on Thu on long liquidation
  • Market was bid in early Asia on Tokyo fix demand, i-day outlook now mixed
  • There are a decent amount of bids said to be circa 113.50

EUR/CHF

  • EUR/CHF contained in hourly cloud, 1.0941/58. 100-HMA at 1.0933
  • 1.0954-44 range. Pullbk to 1.0931 Thurs on haven flows but limited
  • Key downside sppt – 1.0906 is 38.2% Fibo of May’s 1.0793/1.0977 rise
  • Cross struggled by post Brexit hurdles by 1.10. 1.1010 Brexit wk high
  • USD/CHF off its best, 1.0100 peak Thurs. Tight 1.0085-1.0077 Europe

GBP/USD

  • Cable elicited fresh support circa 1.2850 after falling from 1.2889
  • 1.2889 = early Ldn high. Bids around 1.2850 based Thursday losses
  • Asia high was 1.2900, former support level (1.2903 = Tuesday low)
  • Cable slid thru 1.29 Thursday after only one MPC vote for rate hike
  • EUR/GBP up to 0.8458 during European am after +0.6% German Q1 GDP
  • Double UK Q1 GDP: NIESR estimates UK GDP +0.2% 3mths to end-Apr

USD/CAD

  • Mooted bids at 1.3680 lending support to USD/CAD: 1.3686 = early Ldn low
  • 1.3680 was Thursday’s Ldn am low, revisited during North American session
  • More bids tipped at 1.3650 (1.3648 was Wednesday’s low)
  • 1.3700 option expiry for NY cut (closest-to-market), USD 405mn strike
  • USD/CAD has respected 1.3643-1.3793 May 5 range thru week-to-date

AUD/USD   

  • 0.7400 option expiry for NY cut exerting magnetism over AUD/USD
  • AUD 363mn strike. 0.7405 = 4-day high after 0.7372 early Europe low
  • 0.7425 resistance (Monday’s high). US CPI/retail sales data 1230GMT

NZD/USD

  • NZD/USD eyeing 0.6860 after vaulting 0.6848 (Asian session high)
  • 0.6860 was Thursday’s NY session high. 0.6864 = Ldn am high Thursday
  • Bids tipped at 0.6820 (0.6818 = Thurs low) & 0.6800, stops mooted sub-0.68

FX OPTIONS

  • Little to inspire G10 vol longs yet – many curve near long term lows
  • Even 1mth EUR/USD of 0.75 this week, despite June ECB capture
  • Cable 1mth vol targets 2015 lows at 6.3. EUR/GBP vols lows since 2014
  • USD/JPY price action suggests market short downside gamma
  • AUD/USD vols and AUD put risk rev bias back near recent/2.5 year lows

COMMENT
Set trade parameters wide for USD/ZAR longs

The broad EM FX rally is providing short-term relief for the rand as underlying negatives remain. Playing USD/ZAR from the long side is the favoured trade while the potential for further political uncertainty hangs over the rand. Though some way off, the ruling ANC chooses a successor to beleagured President Zuma in December and a smooth transition is unlikely given rifts within the party over Zuma’s sacking of popular finmin Gordhan. The rand is also ultra-sensitive to fragile commodity markets which are being held to ransom by Chinese data. Growth concerns are a further weight on the rand and associated rating agency scrutiny adds to the negative backdrop. USD/ZAR is currently supported by the 100-DMA at 13.3265 and capped by the 200-DMA at 13.6215. Favour a long play at market 13.4250, for a run through the May 5 13.7125 high targeting 14.00. Stop placement below the 55-DMA, currently 13.2290.

FX Market Update 11-5

Market Briefs

  • EUR/USD +0.05%, USD/JPY -0.1%, GBP/USD -0.15%, EUR/GBP +0.2%
  • DXY -0.1%, DAX flat, Silver +1.4%, Copper +1.8%, Brent +1.6%
  • Sterling dips after UK output data disappoints, trade gap widens – Rtrs
  • UK Mar Construction output -0.7% m/m, +2.4% y/y vs prev -1.3%/+0.9% rvsd. 0.3%/2.8% f/c
  • UK Mar Manuf output -0.6% m/m, +2.3% y/y vs prev -0.3%/+3.7% rvsd. 0%/+3.0% f/c
  • UK Mar Ind output -0.5% m/m, +1.4% y/y vs prev -0.8%/+2.5% rvsd. -0.3%/+2.1% f/c
  • UK Mar Global good trade balance -13.441bln vs prev -11.448 rvsd. -11.8bln f/c
  • DE Apr Wholesale price index 0.3% m/m, 4.7% y/y vs prev 0.0%/4.7%
  • CH Apr CPI 0.2% m/m, 0.4% y/y vs prev 0.2%/0.6%. 0.2%/0.5% f/c
  • EU raises euro zone growth forecasts, sees unemployment to drop – Rtrs
  • French exports to rebound in 2017 – central bank head – Rtrs
  • Kiwi slides as NZ c.bank retains inflation outlook, neutral rate bias – Rtrs
  • SNB Jordan: Neg int rates/interventions central to SNB since CHF still sig overvalued – Rtrs
  • Jordan: Monetary policy needs to remain expansive because infl is still very low
  • Norway’s finance minister says crown weakness boosts competitiveness – Rtrs
  • Swedish crown hits one-week high vs. euro after inflation beats forecasts – Rtrs
  • MoF April flow data – Japanese big net sellers of foreign bonds, Y4.2559 tln
  • MoF April flow data – Foreigners good buyers of Japan stocks, JGBs, bills
  • Japan Mar c/a surplus Y2.9077 trln, Y2.6432 eyed, Feb surplus Y2.8136 tln
  • Japan April bank loans continue to show steady rise, +3.0% y/y, March +3.0%

Looking Ahead – Economic Data (GMT)

  • 11:00  GB BOE May QE Corp, 10 bln f/c; last 10 bln
  • 11:00  GB BOE May Bank Rate, 0.25% f/c; last 0.25%
  • 11:00  GB BOE May QE Gilts (GBP), 435 bln f/c; last 435 bln
  • 13:30  Initial Jobless Claims (May 6 week) mkt 245k, prev 238k
  • 13:30  — Continued Claims (Apr 29 week) mkt 1.980 mn, prev 1.964 mn
  • 13:30  PPI-Final Demand (Apr) mkt +0.2% m/m, +2.2% y/y; prev -0.1% m/m, +2.3% y/y
  • 13:30  — PPI-Final Demand Core (Apr) mkt +0.2% m/m, prev +1.7% y/y; prev flat m/m, +1.6% y/y

Looking Ahead – Events, Other Releases (GMT)

  • 11:25  FRB New York’s Dudley on globalization; Mumbai, India

Currency Summaries
EUR/USD

  • Market indecision Wed/Thurs and EUR/USD struggles for direction
  • Plays to base of a 1.0893-1.0864 range into New York
  • May 24 low 1.0821. Unfilled gap 1.0788-1.0821 on the radar
  • Bullish momentum ebbs and long liquidation at play
  • Failure to regain even 100/200-HMAS, now 1.0921, to lean on price
  • US/German rate divergence has stalled but trend weighs EUR/USD bears
  • Chart: US vs Bund:
  • USD/JPY
  • USD/JPY likely has a mixture of offers and stops circa the 114.40 level
  • 114.38 was Wed peak. More offers in size up to 115.00
  • Range has been 114.07-114.37 so far
  • Speculative accounts, long of USD/JPY, aim to take the market higher
  • 1.27bln 114.00 strike set to expire at the NY cut pins near-term

USD/CHF

  • Unwinding of CHF strength broad theme, uptick in risk appetite weighs
  • EUR/CHF holds close to post Brexit hurdles by 1.10. 1.1010 Brexit week high
  • 1.0977 (Tues) was the highest for the cross since Sept 14 1.0985
  • Little lower but pullbacks limited. Plays 1.0974-1.0955 in Europe
  • USD/CHF off to 1.0073 but recovery to 1.0084 ahead of NY. Dble day hi @ 1.0095
  • Market talk of stops above 1.0100. 1.0108 Apr’s high. 1.0170 March

GBP/USD

  • GBP/USD dropped to threaten 1.2900 after weak UK data at 4.30am ET
  • 1.2949 was early Ldn high. Stops tipped below 1.29 (1.2902/03 = recent lows)
  • BoE event risk 7am ET: MPC rate vote initial focus, 7-1 expected
  • Topside stops above 1.30 at risk if Saunders joins Forbes in voting for rate hike
  • 4 recent fails pre-1.30 (option barrier level): Friday, Monday x2 & Wednesday
  • EUR/GBP rose to 0.8428 after the weak UK economic data at 4.30am ET

USD/CAD

  • USD/CAD to 1.3680 during European am as WTI rose to $48.15 (8-day high)
  • 1.3743 was early Europe low as continent digested Moody’s news
  • Moody’s downgraded 6 Canadian banks. 1.3744 = Asia high on Moody’s news
  • Key support 1.3643, May 5 low after 1.38 option barrier threatened same day
  • USD/CAD elicited support pre-1.3643 Monday & Wednesday

AUD/USD

  • AUD/USD is eliciting support from near 2% rise for Ldn copper (+0.67% 2am ET)
  • 0.7379 = European am high. Offers expected near 0.74 (0.7395 = Weds high)
  • Large 0.7400 option expiry for NY cut, AUD 1bln strike
  • Short-covering lifted AUD/NZD to 1.0777 in Asia after RBNZ hurt NZD
  • 1.0610 was Wednesday’s 3mth low, pre-RBNZ event risk

NZD/USD

  • NZD/USD met headwind circa 0.6863 after pushing recovery envelope from 0.6818
  • 0.6818 was 11mth low in Asia after RBNZ-induced purge of NZD longs
  • 0.6863 = May 5 low. Bids tipped at 0.6800-20 (0.6802 = 3 June 2016 low)

FX OPTIONS

  • O/n GBP vol 15.0/80 pips, EUR/GBP 13.0/45 pips in to MPC, Inflation, Carney
  • 1mth GBP vols only marginally higher from 2yr lows since election capture
  • EUR/USD vol slide stalls for now at 2.5yr lows. 1mth propped by June ECB
  • USD/JPY vol recovery stalls as spot falters above 114.00. JPY call bias off lows
  • AUD/USD vols and risk rev not far from 2yr lows, limited downside fears

COMMENT

Specs to favour dollars over yen through May
USD/JPY bias remains firmly on the upside targeting 115.00/116.18 initially, supported by the technical outlook and interest rate differentials. This is fuelling optimism that the recovery cycle from 2017’s 108.13 low will persist throughout May. Current market talk, backed by last week’s increase in IMM yen shorts, is that speculative accounts are strongly favouring USD/JPY longs. This is the first weekly increase in IMM yen shorts since the middle of March. The technical outlook is bullish for a test of 116.18 – 61.8% retrace of the 118.66 to 108.13 (December to April) fall – as long as bulls manage to register a weekly close above 113.40 Fibonacci. UST-JGB yield spreads are likely to widen throughout May as June’s FOMC nears which should put upward pressure on USD/JPY. USD/JPY’s 30/60-day log correlation is significant across the UST-JGB yield curve

Futuro del peso mexicano 11-5

  • USD/MXN opens NY 18.9570, off Wed 19.015 close; drips up a tad to 18.98
  • Risk gains on less bullish outlook for Trump econ agenda, Commods rising
  • US yields lower across the curve, Mex rate hold at 54% for May 18 (IRPR)
  • USD/MXN supt at 18.8970 Thurs low/61.8% Fib area, then 18.84 May 4 low
  • Res 10-HMA 18.9781, 19.0438 daily pivot, hrly cloud twist by 19.10
  • ST vol remain flay near 12%

Futuro del peso mexicano 11-5