EM CEEMEA CREDIT: Kenya (KENINT): Dangote Refinery Update

SFIV6 95.70 puts 12K sold at 8.5

SFIH7 94.90/94.70 1x1.25 put spread paper paid 1.5 on 5K

• As noted earlier this morning, waning risk sentiment has boosted the dollar to start the week, as a combination of Middle East energy supply risks and AI-related concerns linger. Brent crude futures have risen around 3%, the major equity benchmarks are struggling, all translating to the ICE dollar index rising back to 99.50, up 0.4% on the session and approaching the 50-day EMA at 99.65.
• US: This dynamic adds to the more supportive environment provided to the greenback following last week’s US inflation data. Gov Warsh and most of the FOMC are unlikely to be convinced that the August report represents anything close to a resumption of disinflationary progress. Accordingly, the data were enough to see market-implied pricing for a September Fed hike firm to well over 80%, from under 60% prior to PPI.
• JPY: Given the recent volatility and the upcoming BOJ decision on Friday, obvious focus remains on USDJPY, where stalling momentum helped the pair bounce again from the low 153s. The pair has extended intra-day gains to 0.57% in recent trade and is approaching recovery highs at 154.67. Above here, initial resistance to watch is the breakdown area between 155.00-155.23.
• NZD: Broad based dollar strength has seen the likes of AUD and EUR both fall half a percent, but it’s the Kiwi dollar that remains the relative underperformer, now down 0.77% against the greenback. We have highlighted how NZDUSD is approaching a cluster of late July lows at 0.5762, a break of which could see downside momentum build.
  • Further kiwi weakness would specifically place pressure on last week’s cycle high for AUDNZD at 1.2375, as the cross continues to make fresh highs dating back to 2013.