FOREX: Intraday Yield Recovery Flatters Dollar
Jul-10 14:18
- EUR/GBP's relative stability so far today shows that today's decline in GBP/USD and EUR/USD are USD-led, particularly as the USD gained both while equities traded at recovery highs, as well as through the fade off the best levels.
- Despite EUR/GBP stability, however, markets have pressed GBP/AUD through the 100-dma of 2.0716, marking the first break of support since January of a level that helped trigger a bounce in mid-June and earlier this month. Layered support between 2.0672-88 is within range on further losses in the cross, and we note trendline support at around 2.0660.
- For the USD Index, the improvement in the greenback is pushing prices to within 0.1% of a new recovery high. Markets are still looking to test whether prices have successfully formed a base at 96.377, and with pricing of a Fed cut at the July meeting dwindling, the market may look to resolve this move higher on Tuesday's CPI print, strength across which confirm a break of this year's definitive downtrendline.
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FOREX: Dollar Dip Steers Market Clear of Test of Key Resistance
Jun-10 14:17
- USD Index heads into the London close at the lowest levels of the day: the index has shown through the overnight low of 98.8959, but remains clear of the weekly low and last week's pullback low of 98.3510.
- Today's price action keeps prices clear of a material test on key resistance stemming from the downtrendline drawn off the early February highs at 109.881 (today at 99.575) - a level that could draw additional interest on any hawkish repricing stemming from strong inflation prints at this week's CPI & PPI releases.
- Despite a busier European morning, FX futures volumes have faded fast into the NY crossover - extending the theme after a quieter market on Monday. Poor UK jobs data has helped GBP standout: futures have cleared volumes 30% ahead of average for this time of day, but both JPY and EUR markets are considerably quieter than usual.
- The upcoming 3y Treasury auction takes focus next, but the longer-end issuance on Thursday should prove of greater interest as the long-end of the curve across developed markets remains particularly sensitive and helps drive broader sentiment.
EQUITIES: Large EU Basic Resources Put Spread
Jun-10 14:13
Large long dated Basic resource Option ratio Put spread:
- SXPP (21/12/29) 450/300ps 1x1.5, bought for 35.1 in 13.5k (13.5k x 20.25k).
BTP: Block trades
Jun-10 14:07
BTP Block trades, suggest sellers:
- IKU5 ~1.72k at 121.23 and ~1.4k at 121.19.
