GLOBAL: EURJPY Remains 0.9% Higher Despite Turnaround for Equities
Jun-05 17:28
- Prior strength across equity markets evaporated late Thursday as the spat between President Trump and Elon Musk appears to be gathering steam, denting the cautiously optimistic tone that had been associated to apparent progress between the US & China presidents.
- The public breakup between Trump and Musk has escalated quickly, with Musk most recently saying that “Without me, Trump would have lost the election” and describing Trump’s most recent actions as lacking gratitude.
- Sanction headlines may have provided additional headwinds. When asked about greenlighting new sanctions on Russia, Trump declines to answer but notes his previous hawkish position on Russia, namechecking Nordstream 2. Trump suggested he might be willing to implement fresh sanctions on both countries if he determined the conflict wasn’t going to end.
- Currency markets have largely taken the developments in their stride, with USDJPY knocked off it’s 143.97 highs but still remaining up 0.65% on the day at 143.70. Higher front-end US yields over the US session will have been supportive at the margin.
- In contrast to the yen’s underperformance, the Euro is higher on the day following President Lagarde giving a clearly more hawkish/congratulatory tone in the press conference, noting policy is well positioned and that “we are getting to the end of a monetary policy cycle that was responding to compounded shocks.”
- As such, EURJPY is 0.9% firmer, underpinning the bullish conditions for the cross. Sights remain on a cluster of resistance around the 165.00 mark, which has been of pivotal significance dating back to the BOJ’s intervention back in July last year. 165.21, the May 13 high remains the technical bull trigger, of which a breach would target a move towards 166.10, the Nov 6 high.
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US LABOR MARKET: MNI US Employment Insight: Another Month Of Resilience
May-06 17:15
- We have published and e-mailed to subscribers the MNI US Employment Insight.
- Please find the full report including MNI analysis: https://media.marketnews.com/US_Employment_Report_May2025_1306f78f63.pdf
PIPELINE: Corporate Bond Update: Multiple Launches
May-06 17:15
Multiple corporate bonds launched around the Tsy 10Y auction:
- Date $MM Issuer (Priced *, Launch #)
- 05/06 $2B #Grupo Nutresa $1B 5Y 8%, $1B 10Y 9%
- 05/06 $1.75B #Standard Chartered $1B 6NC5 +135, $750M 6NC5 SOFR+168
- 05/06 $1.75B #Biogen $400M +5Y +115, $650M 10Y +145, $700M 30Y +165
- 05/06 $1.5B #Deutsche Bank 6NC5 +140
- 05/06 $1B #Dominion Energy 3Y +87.5
- 05/06 $750B #Gold Fields 7Y +175
- 05/06 $650M #American Homes 4 Rent 5Y +117
- 05/06 $500M #SURA Asset Mgt 7Y +230
- 05/06 $500M *Shinhan Bank 5Y +72
- 05/06 $500M #LYB Int 10Y +187
- 05/06 $Benchmark Bank of America 4NC3 +110a, 4NC3 SOFR+134, 11NC10 +140a
- 05/06 $Benchmark Starbucks Corp 3Y +100a, 5Y +115a, 10Y+135a
- 05/06 $Benchmark Cummins Inc +80a, +5Y +100a, 10Y +120a
- 05/06 $Benchmark Host Hotels & Resorts 7Y +195a
- 05/06 $Benchmark PNC 2NC1 +100a, 6NC5 +120a
- 05/06 $Benchmark UBS 11NC10 +128
- 05/06 $500M Eaton WNG 5Y +90a
FOREX: Trump’s Big Imminent Announcement Unable to Curtail USD Weakness
May-06 17:15
- US yields have moved lower on Tuesday, which alongside some downward pressure on equity benchmarks, have enabled the underlying trend of a weakening dollar to prevail through the session. Having respected its 20-day exponential moving average well, the USD index is now back below 99.50, highlighting that the recent move above 100 in early May appears to be technically corrective.
- This dynamic sees the Japanese Yen as the best performer, with USDJPY comfortably back below the 143.00 mark, having entirely eroded the post-BOJ upswing from last week. Even the late rhetoric from President Trump suggesting there will be a “very big” positive announcement in the coming days was quickly brushed aside. The trend direction in USDJPY remains bearish and gains since Apr 22 are considered corrective. This refocuses short-term attention on initial support at 141.97, the Apr 29 low.
- Divergence between the low yielders is also notable today, as CHFJPY weakens around 0.85%. 176.00 has provided an important pivot point this year for that cross, and this week’s selloff bolsters the short-term significance of that resistance level. Moves have been underpinned by a more concerned tone regarding Swiss Franc strength from SNB President Schlegel, potentially highlighting that the risk reward for further Franc gains may be diminishing at this juncture.
- Elsewhere, gains for G10 currencies have largely mirrored the adjustment for the DXY, with the likes of EUR, GBP, AUD, NZD and CAD all rising around half a percent.
- Notably, USDCAD printed fresh cycle lows as President Trump made comments on the USMCA being still very effective and potentially not needing to be renegotiated. A dominant downtrend is in place for USDCAD, signalling scope for a move towards 1.3643, the Oct 9 ’24 low.
