FOREX: Greenback Tilts Higher Friday, GBPUSD Edges Back Towards 1.3200
Nov-28 09:55
- Despite remaining below the 100.00 mark, the USD index has been drifting higher on Friday morning, paring a portion of this week’s downswing. This has helped the likes of EUR and GBP to underperform across G10, while NZD trims its impressive post-RBNZ advance. The moderate greenback optimism has also prompted a punchy turnaround for gold, falling from overnight highs of $4,193 to session lows of $4,155 around 8am London.
- For NZDUSD, the pair kicked on through its 20-day EMA resistance this week, but importantly has found solid supply at the next touted resistance zone around 0.5725/30, which represents both the 50-day and prior trendline support turned resistance.
- It is worth flagging that yesterday’s EURUSD candle pattern is a doji - a potential reversal signal, and highlighting that this week’s recovery appears corrective – for now. Short-term technical parameters appear well defined; key short-term resistance to monitor at 1.1656, the Nov 13 high and key support at 1.1469, the Nov 5 low.
- Concerns surrounding the degree of fiscal tightening that will ultimately be deployed and likely BOE easing in December remain headwinds for the pound. GBPUSD highs of 1.3269 Thursday closely coincided with a test of 50-day EMA resistance, and today’s move back towards 1.3200 keeps the dominant downtrend in place for now.
- The highlight on the Economic calendar is Canada GDP, while volumes may remain on the low side owing to the US Thanksgiving holiday.
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FOREX: FX OPTION EXPIRY
Oct-29 09:36
Of note:
EURUSD 2.87bn at 1.1600/1.1650.
AUDUSD 1.83bn at 0.6530 (a little far).
EURUSD ~1bn at 1.1650 (thu).
USDCAD 2.42bn at 1.4015/1.4025 (thu).
USDJPY 1.15bn at 152.50 (fri).
EURUSD ~1bn at 1.1640 (tue).
- EURUSD: 1.1600 (637mln), 1.1615 (346mln), 1.1640 (651mln), 1.1650 (1.24bn), 1.1670 (679mln), 1.1675 (282mln).
- USDJPY: 152.50 (299mln).
- USDCAD: 1.3970 (470mln).
- AUDUSD: 0.6530 (1.83bn).
- USDZAR: 17.1500 (210mln).
BONDS: Supply Underpinning Yields; 10-year Gilt/Bund Close To YTD Low
Oct-29 09:34
- Impending sovereign supply is likely underpinning UK and German yields this morning, keeping the 10-year Gilt/Bund spread close to the 2025 low of ~177.5bps.
- The DMO will sell GBP3.75bln of the new 4.125% Mar-33 Gilt at 1000GMT. Meanwhile, Germany will sell E4.5bln of the 10-year 2.60% Aug-35 Bund at 1030GMT.
- The April low continues to contain downside in 10-year Gilts, which are currently little changed at 4.40%.
- Spanish Q3 flash GDP confirmed expectations at 0.6% Q/Q (vs 0.8% prior), but domestic demand signals were solid. UK September consumer credit was in line with expectations.
- The EFSF has sent an RFP for an upcoming transaction, which will likely be held early next week.
- In the Eurozone, focus remains on the ECB decision (Thurs), Eurozone Q3 flash GDP (Thurs) and October flash inflation (Fri). In the UK, spillover from US Treasuries amid today’s FOMC decision will be eyed alongside ongoing budget headline flow.
MNI: UK BOE SEP MORTGAGE APPROVALS 65,944
Oct-29 09:30
- MNI: UK BOE SEP MORTGAGE APPROVALS 65,944
- UK BOE SEP SECURED LENDING GBP5.49 BLN
- UK BOE SEP CONSUMER CREDIT GBP1.49 BLN
