EUR: EURCAD heading towards big support

Apr-27 13:28
  • EURCAD is heading towards the 21st April low at 1.35199, this is also the lowest print since 29th May 2015.

Chart source: MNI/Bloomberg

Historical bullets

GERMANY: Scholz: 300k Refugees From Ukraine 'Just The Beginning'

Mar-28 13:27

Wires carrying comments from Chancellor Olaf Scholz stating that 300k refugees from Ukraine have travelled to Germany, adding 'but that's just the beginning'.

  • The comments from Scholz almost mirror that of previous Chancellor Angela Merkel, who made the famous comment that "Wir schaffen das" ("we can do this") at the height of the 2015 immigration crisis into Europe from the Middle East and North Africa.
  • Merkel's 'welcome policy' towards what is estimated at over one million refugees and migrants has been viewed as a significant factor in the rise of the right-wing nationalist Alternative for Germany (AfD) in the 2017 federal election. Prior to this point, the far right had not held any seats in the Bundestag since the end of WWII.
  • So far the public attitude towards Ukrainian refugees in Germany has been positive. However, with increasingly large numbers expected to arrive in Germany in the coming days, weeks, and months this could see public pressure rise on city, state, and the federal gov't should public services come under significant strain. This could see political risk in Germany escalate in the long term, with a potential backlash against the gov't from the political right.
  • Speaking alongside Swedish PM Magdalena Andersson, Scholz states that “We cannot and will not get used to this state of war ... We call on the Russian president to finally agree on a ceasefire and enter into serious negotiations with Ukraine. The Russian troops must withdraw.”

USD: Push in USD Index Presses Toward 2022 High

Mar-28 13:23
  • EUR and GBP weakness taking over as the drivers for the USD Index strength here (combined, they make up just under 70% of the USD Index vs. The JPY's 13.6%) which is coming closer to testing the 2022 cycle high of 99.418, last printed on March 7th.
  • GBP/USD pullback has the pair narrowing in on key support at 1.3000, the Mar 15 low and bear trigger. Losses through here open levels not seen since 2020.
  • Moves follow appearance from BoE's Bailey earlier today who flagged the Bank's decision to soften guidance on future rate rises to reflect the high level of economic uncertainty. This environment clearly persists, with S&P just this morning revising their 2022 UK growth forecast lower amid higher inflation weighing on disposable incomes

EGB OPTIONS: June Bun Call Spread Buyer

Mar-28 13:07

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