TARIFFS: Navarro: Take EU-US Trade Deal Reports With "Grain Of Salt"
Jul-23 18:00
A brief risk-off move on a comment by White House adviser Peter Navarro on Bloomberg TV referring to earlier reports of a EU-US trade deal nearing completion that would include a 15% baseline tariff - Navarro says:
- "We don't negotiate in public. These other countries aspirationally negotiate in public to try to get us to where they want us to go. I would say even though it was reported on Bloomberg, I would take it with a grain of salt. Never assume anything is fixed until the boss says it is fixed... Let's see what happens."
- Navarro's comments weren't quite as concrete as initially feared from the headlines ("*NAVARRO ON US-EU DEAL REPORT: TAKE IT WITH A GRAIN OF SALT" -bbg) so the risk-off move (worth about 10 points in the S&P) quickly reversed.
- Immediate focus is on a reported EU member state vote on tariff countermeasures Thursday in case a deal can't be reached with the US by Aug 1.
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EURGBP TECHS: Holding On To Its Gains
Jun-23 18:00
- RES 4: 0.8648 76.4% retracement of the Apr 11 - May 29 downleg
- RES 3: 0.8624 High Apr 21
- RES 2: 0.8592 61.8% retracement of the Apr 11 - May 29 downleg
- RES 1: 0.8575 Intraday high
- PRICE: 0.8557 @ 15:38 BST Jun 23
- SUP 1: 0.8488/8465 20- and 50-day EMA values
- SUP 2: 0.8407/8356 Low Jun 4 / Low May 29 and the bear trigger
- SUP 3: 0.8327 1.382 proj of the Apr 11 - 16 - 21 price swing
- SUP 4: 0.8316 Low Mar 28 and a key support
A bullish theme in EURGBP remains intact and the cross is holding on to its gains. The recent breach of the 50-day EMA highlighted a stronger reversal. This signals scope for a climb towards 0.8592 next, a Fibonacci retracement. On the downside, support to watch lies at 0.8465, the 50-day EMA. Clearance of this level would instead highlight a possible reversal. Support at the 20-day EMA is at 0.8488.
SOFR OPTIONS: Latest SOFR Trades
Jun-23 17:57
- Block, 5,000 SFRQ5 96.00/96.12/96.25/96.37 call condors ref 95.955
- -10,000 SFRU5 95.75/0QU5 96.25 put spds, 0.0 0QU sold over
FOREX: US Dollar Extending Intra-Day Reversal Lower
Jun-23 17:46
- The intra-day reversal lower for the greenback is extending, as the USD index now trades through last Friday’s lows, roughly 1% below the earlier session highs. Lower oil prices and resilient equity benchmarks are assisting the renewed USD weakness, despite the plethora of headlines crossing surrounding Iran’s launch of missile attacks towards a US air base in Qatar.
- The likes of GBPUSD (+0.50%) and EURUSD (+0.36%) are leading the charge within the G10 complex. For EURUSD, the bullish trend remains firmly in place and scope remains seen for a climb towards 1.1696, a Fibonacci projection. Recovering global sentiment has tilted the likes of AUD and NZD back to unchanged on the day after being the standout laggards earlier on Monday.
- Euro resilience has also been notable against the crosses with the likes of EURAUD and EURNZD holding onto 0.5% gains on the session.
- JPY volatility has not disappointed, although the Japanese currency has followed the broader dollar trend rather than being impacted by safe haven flows. Initially, USDJPY rose as high as 148.03, which may have been exacerbated by positioning dynamics. However, since then, the pair tracks around 180 pips lower, and is edging towards the overnight lows at the 146.00 handle. Below here, support to watch lies at 145.08, the 50-day EMA.
- The main beneficiary on Monday has been the Swiss Franc, as USDCHF falls 0.67% and edges back towards 0.8100, while CHFJPY has appreciated 0.76%. Earlier in the session spot printed up to 180.88, record highs for the cross.
- Focus on the data calendar tomorrow will be on German IFO, Canada CPI and US consumer confidence. Fed Chair Powell will also deliver his congressional testimony.
