OPTIONS: Expiries for Aug08 NY cut 1000ET (Source DTCC)

Of note:

EURUSD 1.78bn at 1.1700.

EURUSD 2.39bn at 1.1650 (thu).

USDJPY 1.2bn at 147.00/147.25 (thu).

EURUSD 1.14bn a6 1.1700 (fri).

• EURUSD: 1.1650 (457mln), 1.1675 (503mln), 1.1690 (289mln), 1.1700 (1.78bn), 1.1750 (249mln).
• AUDUSD: 0.6495 (247mln), 0.6500 (360mln), 0.6550 (607mln).

• Not seen any new headline on this latest bid in Govies, seems to have started in ERU5, lifted in 5k, rest of the flows, saw Bobl and the Schatz both bought in 5k, and US TYU5 in 4k.
• This looks to be more order flow related, and not much reaction in Bonds from the extension higher in European Equites, and especially the Banking sector.

Westpac look to enter long AUD/NZD.

• They write “in the wake of this week’s trans-Tasman central bank decisions, we are inclined to adopt a bullish bias for the weeks ahead. The RBA clearly surprised markets in a hawkish direction, while the RBNZ’s pause and guidance were largely as expected and resulted in a muted reaction.”
• Westpac note that “the cross broke above month-old resistance at 1.0845 yesterday, and while we are loathe to chase it, we would buy on any pullback to that break level. We’d target 1.1000, with a stop-loss at 1.0795”.