FOREX: G10 Wrap - USD Can The Bounce Extend
The BBDXY has had an Asian range of 1229.53 - 1232.75, Asia is currently trading around 1230. Finally a sustained move higher in the USD off levels that were overdone in the short-term, can it extend ?. “ The US said it's developing a fast-track process for screening foreign investments in the US, an effort Trump administration officials expect could smooth the way for billions from wealth funds in Saudi Arabia, the United Arab Emirates and Qatar.” - per BBG. "GOLDMAN SACHS NOW EXPECTS BOE TO HOLD INTEREST RATES AT THE JUNE MEETING VS PRIOR FORECAST OF A 25 BP CUT - [RTRS]"
- EUR/USD - Asian range 1.1197 - 1.1233, Asia is currently trading 1.1225. Intra-day support has been broken, price is now testing longer-term support around 1.1200, a sustained break below here would then target 1.1000. The market is still expected to use dips as a buying opportunity.
- GBP/USD - Asian range 1.3212 - 1.3253, Asia is currently dealing around 1.3235. GBP held up against its crosses but against the USD it has broken through the support around 13250. If sustained we could see this correction extend further, buyers are expected to return back towards 1.3000/3100.
- USD/JPY - Asian range 145.47 - 146.19, the Asia session has seen a reversal of some of the overnight moves. The 146.00/1.4700 area remains the first area in which sellers should be eager to get involved, then the more important 149/151 area.
- USD/CNH - Asian range 7.2378 - 7.2528, the USD/CNY fix printed 7.2095. Asia is currently dealing around 7.2475, sellers have capped the 7.2500 in Asia. A move through this area targets 7.27/30.
- Cross asset : SPX +0.11%, Gold $3315, US 10-Year 4.36%, BBDXY 1230, Crude oil $60.16.
- Data/Events : Italy Industrial Production, Greece CPI, US N/Y Fed 1-Yr Inflation Expectations
Fig 1: EUR/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg
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BUND TECHS: (M5) Pullback Considered Corrective
- RES 4: 132.80 High Feb 5
- RES 3: 132.56 High Feb 28 and a key resistance
- RES 2: 132.03 High Apr 7 and the bull trigger
- RES 1: 130.57 50.0% retracement of Monday’s high-low range
- PRICE: 130.14 @ 05:26 BST Apr 9
- SUP 1: 129.22 20-day EMA
- SUP 2: 128.47 Low Mar 28
- SUP 3: 127.74 Low Mar 25 and a key short-term support
- SUP 4: 127.20 Low Mar 17
Bund futures traded in a volatile manner Monday and remain below their recent highs. A bull cycle remains in play and a pullback is considered corrective. A fresh short-term cycle high Monday signals scope for a continuation of the uptrend. The contract has cleared 131.14, 76.4% of the Feb 28 - Mar 11 bear leg. This strengthens the bullish condition and opens 132.56, the Feb 28 high. Initial firm support lies at 129.22, the 20-day EMA.
US TSY FLOWS: Block SELL: UXYM5
4631 of UXYM5 traded at 112-14, post-time 04:53:15 BST (DV01 $403,533). The contract is currently dealing at 111-26+, -2-06 from closing levels.
US TSYS: Savage Bear-Steepener As China Retaliation In Focus
TYM5 is 110-12+, +1-02+ from closing levels in today's Asia-Pac session.
- Cash US tsys have extended yesterday’s decline during the Asia-Pac session. The sell-off reflects growing concerns that China may retaliate against tariffs by offloading US assets, including US tsys.
- At present, cash US tsys are trading 3-16bps cheaper across benchmarks, with the curve steeper.
- Yesterday, Trump officials confirmed 104% added tariff on China went into effect at noon.
- Concurrently, China vowed to "fight to the end".
- On the local front, the focus turns to the March FOMC minute release at 1400ET today, CPI on Thursday and PPI on Friday morning.
- Reminder, banks kick off the latest earnings cycle this Friday with Bank of New York Mellon, Wells Fargo & Co, JPMorgan Chase and Morgan Stanley reporting.
