GBPUSD TECHS: Corrective Pullback

A new YouGov survey has found that, “Americans are more likely to think that the country's standing in the world has worsened than improved (48% vs. 30%) since Donald Trump became president in January."

• YouGov notes: “Few Americans (13%) think Trump has a great deal of respect for leaders of other countries, and similar shares say the same about how much other world leaders respect Trump (17% say a great deal) and how much people in other countries do (11%)"
• The survey notes, "Americans are divided on whether Trump has a clear plan for U.S. trade policy; slightly more say he doesn't than does (45% vs. 39%)," with "Three-quarters (74%) of Americans think that Trump's tariffs will increase prices they pay for things: 44% think they will increase prices a lot and 30% think they will a little".
• On the fairness of trade, "Of 10 countries asked about in the poll, nine are either more likely or equally likely to be seen by Americans as having a mostly fair trade relationship with the U.S. than to be seen as having a mostly unfair one. China is the exception."

Figure 1: "Do you think that recent tariffs imposed by Donald Trump will help or hurt the following? (% of U.S. adult citizens)"

Source: YouGov

• Date $MM Issuer (Priced *, Launch #)
• 05/14 $3.5B #Woodside Finance 500M 3Y +105, $1.25B 5Y +130, $500M 7Y +145, $1.25B 10Y +160
• 05/14 $2.5B #Societe Generale $1B 4NC3 +120, $500M 4NC3 SOFR+142, $1B 6NC5 +135
• 05/14 $1.5B #Var Energi $750M each: 5Y +175, 10Y +205
• 05/14 $1B *AIIB WNG 10Y SOFR+61
• 05/14 $1B #Athene 30Y +172
• 05/14 $750M #Swedbank 5Y +93
• 05/14 $600M #Peachtree Corners 10Y +150
• 05/14 $Benchmark PSEG Power 5Y +110, 10Y +132
• 05/14 $500M Bombardier 8NC3
• 05/14 $500M Navient 7NC
• Expected Thursday:
• 05/15 $Benchmark JICA 5Y SOFR+67a

• Tuesday’s theme of a weakening US dollar initially extended today, helped lower by major equity benchmarks consolidating their recent strength and headlines surrounding trade talks providing an additional greenback headwind. The US and South Korea agreed to share a mutual understanding of the principles they hold for operating foreign exchange markets and to continue discussions on FX policy. The headlines spurred some USDKRW weakness, which then filtered through to a broader dollar move against G10 peers.
• Later in the session, an article dropped on Bloomberg countering this theme, and suggesting US officials are not seeking to include currency policy pledges in trade deals, according to a person familiar with the matter.
• Overall, the USD index is broadly unchanged, despite initially bridging the gap to last Friday’s close, and eroding the entirety of the US/China tariff reprieve inspired rally to start the week.
• Hardest hit on Wednesday was USDJPY, which has traded in an impressive 206 pip range. The Japanese yen had been trading in a relatively weak manner amid the risk sentiment surge, however, discussions on FX policy being discussed between other administrations prompted some speculative yen appreciation. USDJPY traded as low as 145.61, and was down as much as 1.27% before stabilising. USDJPY has pared over half the move and stands around 146.70 as we approach the APAC crossover.
• Elsewhere, the likes of AUD and NZD are underperforming (down around 0.45%), although they still remain among the best performers in G10 this week. For AUDUSD, Monday’s move lower was considered corrective and another test above 0.6500 today reinforces the underlying bullish tone. Further strength would open 0.6528, the Nov 29 high, although there appears scope for a more protracted recovery towards the US election related highs at 0.6688.
• Thursday’s APAC session will be highlighted by the Australian unemployment report, before the focus turns to UK GDP. In the US, PPI and Retail Sales data are scheduled, which will be followed by Fed Chair Powell speaking.