FOREX: AUDUSD Rises Back to 0.6700 Amid Equity Strength
Jan-02 10:29
- A solid rally for the major equity benchmarks to start the year has propelled AUD to the top of the G10 FX leaderboard this morning, with AUDUSD rising ~0.4%. With the notable bounce, spot has returned to pre-Christmas levels around the 0.6700 handle, maintaining the supportive tone that was on display throughout December. Recent clearance of a key resistance point at 0.6707 (Sep 17 high) confirms a resumption of the medium-term uptrend that started Apr 9. This signals scope for an extension towards 0.6759 next, the Apr 11 2024 high.
- The Euro is the main underperformer in G10 this morning following downward revisions in the Eurozone December Manufacturing PMI. Attempts above the 1.1800 handle across December have proved short-lived, with the pair tracking back towards 1.17 at typing. The breach of the 20-day EMA at 1.1724, will be monitored as a clear break would signal scope for a deeper retracement, allowing an overbought condition to unwind.
- Over the holiday period, USDJPY has unsurprisingly traded in a more contained manner, broadly respecting a 156.00-157.00 range. Topside momentum stalled at 157.00 this morning for a second time this week, however, spot continues to hover close to recent highs. Moving average studies highlight a dominant uptrend, with attention remaining on 157.89, the Nov 20 high and the bull trigger.
- Today's data calendar is light, with the final December US Manufacturing PMI not expected to move the needle, but Fed's Paulson and Kashkari scheduled to speak over the weekend. Both of them are under elevated scrutiny as they newly come into rotation of FOMC voters with the start of the new year.
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ITALY AUCTION RESULTS: Buyback auction results
Dec-03 10:25
- E1.115bln of the 3.20% Jan-26 BTP Short Term (ISIN: IT0005584302) at 100.120
- E1.020bln of the 4.50% Mar-26 BTP (ISIN: IT0004644735) at 100.577
- E1.112bln of the 3.80% Apr-26 BTP (ISIN: IT0005538597) at 100.585
- E1.015bln of the 3.10% Aug-26 BTP Short Term (ISIN: IT0005607269) at 100.681
- E1.264bln of the 3.85% Sep-26 BTP (ISIN: IT0005556011) at 101.305
- E0.720bln of the 0.55% May-26 BTP Italia (ISIN: IT0005332835) at 99.549
- E0.754bln of the 0.50% Apr-26 CCTeu (ISIN: IT0005428617) at 100.222
FOREX: Greenback Tilts Lower amid Risk Optimism/Hasset Chair Expectations
Dec-03 10:22
- The risk backdrop remains stable Wednesday, allowing the major indices and crypto markets to edge higher and provide a negative tilt to the US dollar. The greenback tone was also set late last night as President Trump’s nod towards Kevin Hassett potentially becoming the next Fed Chair confirms the dovish bias to market Fed pricing for 2026.
- These dynamics have prompted GBP and the Scandies to outperform on the session. For GBPUSD specifically, spot has edged to a fresh recovery and post-budget high, with momentum building on the better-than-expected PMI print. Prices are now meeting an uptrendline drawn off the Nov13 high on the 15min candle chart - meaning further strength here could trigger more on the follow through. A close back above the 50-day EMA for cable would also be the first since early October. Mirroring the move, EURGBP has firmly rejected the test of 0.88 overnight, erasing the majority of Monday's rally.
- For EURUSD, we are currently testing above key resistance and the bull trigger at 1.1656. The moves come despite the latest Kremlin commentary pouring cold water on the prospects of a peace deal, with prediction markets' odds for a ceasefire by the end of '26 falling below 50%.
- Despite a weaker-than-expected Q3 GDP print, stronger domestic demand growth is likely to keep the RBA in cautious mode, underpinning the firm AUD recovery. Elsewhere, softer-than-expected Swiss CPI figures did little to move the Swiss needle.
- A wide set of US data is scheduled for today, including weekly MBA Mortgage Applications, November ADP, September import / export prices, September IP, and ISM Services.
EGB OPTIONS: Bobl Call Fly
Dec-03 10:22
OEG6 117/118/119c fly, bought for 14.5 in 2.5k.
