FED: Limited View Changes After A Hawkish FOMC: Citi & TDS Delay/Drop Cuts
Jun-18 09:52
There has been little immediate change in analyst Fed rate views since yesterday's hawkish FOMC shif...
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BOE: ILTR usage stabilises this week; Net usage down GBP188mln
May-19 09:49
- Net usage of the ILR is down GBP188mln on the week at GBP60.912bln (with the biggest adjustment for Level A collateral usage which is down GBP213mln on the week).
- This stabilisation comes as we have got through the big increases of six months ago (coinciding with the TFSME repayments) that have now largely been rolled.
SOFR OPTIONS: SFRM6 96.3125/96.25 Put Spread Blocked
May-19 09:46
A couple of block trades registered in the SFRM6 96.3125/96.25 put spread 5K blocked at 0.5 over 2 clips, CME points to a buyer of the put spread.
AUD: AUDUSD Testing 50-day EMA as USD Index Reverses Higher
May-19 09:46
- Yesterday’s USD weakness ran against the tide of last week’s price action, especially considering the softer risk backdrop. Greenback price action this morning has been more constructive, with dollar indices rising around 0.25%, potentially signalling that dips remain corrective at this juncture. Overall, the Iran peace talks stalemate and the worrying signs in US inflation last week are keeping the extreme levels for US Treasury yields in focus and the supportive USD narrative intact.
- AUD weakness stands out on Tuesday, and comes after RBA minutes confirmed a pause in June seems likely. AUDUSD is now 2.3% below the recent cycle highs, and is currently testing 50-day EMA support, intersecting at 0.7112. A clear break of this hurdle would be required to signal a stronger reversal.
- RBA Assistant Governor Hunter also spoke overnight, reiterating that given capacity and domestic cost pressures prior to the onset of the Iran War, RBA research suggests the pass through of higher fuel prices in Australia “will be faster and more extensive” and the risk of higher inflation expectations is elevated.
- Analysts remain optimistic on the near-term prospects of AUD: Goldman Sachs see “Sterling downside versus the likes of AUD […]”, Lloyds would “retain longs” in AUDUSD, while MUFG “maintain long AUDSEK”. If proving right, this would mean today’s levels could provide an attractive entry point for long setting.
- Labour market data will be the next domestic driver for AUD, scheduled for Thursday.
