GBP: Light Volume Rally Sees GBP/USD Strength Falter Into 1.3331
Aug-06 12:02
- The modest USD weakness seen into the NY crossover is helping GBP/USD higher, however strength is capped into Monday's post-NFP high of 1.3331 (EUR/USD saw a run higher on the break of the equivalent level). Today's moves are on relatively light volumes: CME GBP futures have seen a mere two-thirds average volume for this time day - typifying the quiet week we've had so far.
- Resilient GBP/USD comes despite the NIESR estimates out earlier today that suggests the government are facing a more dire fiscal picture in Autumn than previously expected - suggesting markets are well priced for sharp spending cuts and/or tax rises at the next Budget.
- Instead, it's the BoE decision Thursday that could be of more consequence, and in particular the vote split: 2-5-2 (50bps cut, 25bps cut, unch) is the modal consensus - and we flag that the baseline projections may become less useful as a communication tool going forward - and as such, less market relevant. Our full BoE preview is here: https://media.marketnews.com/MNI_Bo_E_Preview_Aug25_42afebd294.pdf
- EUR/GBP remains in a nascent uptrend, evident in the recovery from last Thursday's low. Key resistance and the bull trigger remains at 0.8769, the Jul 27 high.
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SPAIN T-BILL AUCTION PREVIEW: On offer this week
Jul-07 12:01
Tesoro Publico has announced it will be looking to sell a combined E2.0-3.0bln of the following letras at its auction tomorrow, July 8:
- the 3-month Oct 10, 2025 letras
- the 9-month Apr 10, 2026 letras
EUR: EURGBP Targets the immediate support.
Jul-07 11:45
- The EUR is mostly mixed against G10s, the Stokkie is still the best performer following the rise in Inflation for Sweden.
- The Kiwi sits at the other end, down 0.56% but off its worst earlier levels, after EURNZD rallied to its highest level since mid April heading into the European session.
- EURGBP targets the next immediate support at 0.8606, this was last Thursday's low.
- A clear break through the figure would challenge 0.8550/0.8503 20- and 50-day EMA values, but given that the main focus is on Tariffs this Week, some of the momentum could be somewhat more contained.
PIPELINE: Early Corporate Bond Roundup: IADB, Shinhan, Nissan Motors on Tap
Jul-07 11:44
- Date $MM Issuer (Priced *, Launch #)
- 07/07 $Benchmark IADB 10Y
- 07/07 $Benchmark Nissan Motor 5Y 7.25%a, 7Y 7.75%a, 10Y 8%a
- 07/07 $Benchmark Shinhan Financial 5Y +63
- 07/07 $Benchmark NTT Finance Corp multi tranche investor calls: 2Y, 3Y fix/SOFR, 5Y fix/SOFR, 7Y, 10Y, 12Y -- in addition to EUR issuance 2Y, -4Y, 8Y and 12Y
