FOREX: JPY Crosses-CNY/JPY Approaching Resistance After Leading Underperformance
US equities bounced hard into the US close and have continued on to the Asian open on much better than expected results from both Amazon and Apple, E-minis(S&P) +0.60%, NQZ5 +1.15%. There Yen has had a mixed performance in the crosses, its underperformance being led by the likes of CNH/JPY and EUR/JPY.
- EUR/JPY - Overnight range 178.08 - 178.82, Asia is trading around 178.00. The pair's surge higher ran out of steam as it approached the 179.00 area. I suspect dips will continue to be supported as EUR/JPY trades at levels not seen since the early 1990s.
- GBP/JPY - Overnight 202.34 - 203.26, Asia trades around 202.30. This pair has found good support back toward the 200.00 area and is attempting to push higher from there. It remains for the moment in the middle of its recent 200-205 range, my bias is to play from the long side while it continues to hold above 199-200.
- NZD/JPY - Overnight range 88.34 - 88.82, Asia is currently dealing 88.15. This pair continues to chop around sideways within its wider 85-90 range. If you wanted a long JPY trade in your basket as a hedge I would prefer this pair, a break above 89.00/90.00 and you are wrong.
- CNH/JPY - Overnight range 21.5704 - 21.7036, Asia is currently trading around 21.6300. The pair continues to build on its upward momentum. Price is now testing some decent resistance in the 21.65-21.75 area, after such a good move it is probably prudent to expect a pause and some consolidation. Through this resistance the focus will turn toward the 22.00/22.20 area. Dips back towards 21.20-21.30 should now find support.
Fig 1 : CNH/JPY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSSIE BONDS: Holding Cheaper, Market Continues To Price Out RBA Cut
ACGBs (YM -4.0 & XM -5.5) remain weaker.
- S&P Global PMI Manufacturing Index falls to 51.4 from 53 in Aug.
- Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's modest twist-steepener.
- Cash ACGBs are 4-7bps cheaper with the AU-US 10-year yield differential at +22bps.
- The latest ACGB Dec-34 supply achieved a weighted average yield that printed 0.40bp through prevailing mids (per Yieldbroker). However, the cover ratio decreased to 2.1033x, thelowest since its debut in 2023, from 3.1708x.
- The bills strip is -4 to -6 beyond the first contract.
- RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision. Pricing across meetings is 1-4bps firmer than yesterday’s pre-RBA levels. Notably, this post-RBA move leaves pricing some 10-19bps firmer than last Wednesday’s pre-CPI levels.
- A 25bp rate cut in October is given a 35% probability, with a cumulative 11bps of easing priced by year-end.
STIR: RBA Dated OIS’ Firming Since August CPI Extends After RBA Decision
RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision.
- At the time of writing, pricing across meetings was 1-4bps firmer than yesterday’s pre-RBA levels.
- Notably, this post-RBA move leaves pricing some 10-19bps firmer than last Wednesday’s pre-CPI levels.
- A 25bp rate cut in October is given a 35% probability, with a cumulative 11bps of easing priced by year-end.
Figure 1: RBA-Dated OIS – Current Vs. Pre-CPI
Source: Bloomberg Finance LP / MNI
CRYPTO: Ethereum - Bounces, Technically $4300-$4500 To Be Faded First Up
Ethereum had a range overnight of $4093.19 - $4208.98, Asia is trading around $4152, -1.05%. Ethereum had a decent bounce after triggering stop losses sub $4000 last week. Having broken big support around $4100, technically rallies should now be faded initially. The first sell zone is now back towards the $4300/$4500 area.
- Menthor Q on X: "Crypto asset flows. "Digital asset investment products saw US$812m in outflows last week, though YTD inflows remain robust at US$39.6bn, close to last year’s record ... Bitcoin (-US$719m) and Ethereum (-US$409m) faced pressure, while Solana (+US$291m) attracted strong inflows.”
- Milk Road on X: “For a decade, crypto has moved in 2yr up / 2yr down cycles, pointing to a 2025 peak. But the data just shifted. PMI, liquidity, and analysts all say the cycle hasn’t ended, it’s been extended. The top now looks more like 2026… or later”
- “FTX will release $1.6B in stablecoins to creditors today. That’s $1.6B in fresh liquidity about to hit the crypto markets. Fresh powder is on the way.”
Fig 1: Ethereum spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
