FOREX: NZD Remains Strongest in G10, Post-Budget Boost for GBP
Nov-26 17:53
- NZD remains the strongest G10 currency following the hawkish cut from the RBNZ, with two additional factors bolstering the NZDUSD recovery. First of all, the dollar leg has also been playing ball, with December Fed cut pricing now standing at ~80% helping the DXY to pull lower from the strong touted resistance between 100.40-50. Furthermore, the strong bounce for major equity benchmarks is keeping risk on the front foot ahead of the Thanksgiving holiday.
- As such, NZDUSD is through 20-day EMA resistance, which intersected at 0.5659. This signals scope for a stronger recovery to 0.5725, which represents both the 50-day and prior trendline support turned resistance. 0.5800 remains a key medium-term pivot.
- While some may point to the higher-than-expected headroom announced in the budget as assisting today’s strong GBP performance, subject to the credibility of the forecasts, we have noted that overall, the main surprise of today’s budget was in the delivery and the timing, rather than the measures announced.
- Therefore, the constructive price action for sterling may be more a result of further position unwinds and the firmer risk sentiment. General dollar weakness has certainly supported this dynamic for GBPUSD, which has extended gains to 0.5% as we approach the Thursday’s Thanksgiving holiday in the US. The pair has further distanced itself from the 20-day EMA, placing the next focus on the key 50-day average, intersecting at 1.3261.
- USDJPY has seen a relatively contained range through the US session, broadly consolidating a 0.25% advance on the session. USDJPY has been largely immune to the extension of general dollar weakness, as higher US yields and equities provide offsetting factors.
- The overnight dip to 155.65 was very well supported, as domestic fiscal uncertainties in Japan surrounding the proposed stimulus plans remain an ongoing headwind for the yen, alongside China/Japan tensions continuing to simmer in the background. The path of least resistance appears to remain higher for USDJPY, despite the verbal warnings on potential FX intervention.
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UK: MNI Gilt Week Ahead
Oct-27 17:24
- There is no tier 1 data this week which puts us at the mercy of external events and domestic fiscal headlines to some extent. However, this week will still see the release of some potentially relevant second tier data.
- We round up the most relevant fiscal headlines, their impacts and their potential costs.
- Overnight tonight we will receive the BRC monthly Shop Price Monitor (SPM) while overnight Tues/Wed we see the release of Brightmine pay data. We look ahead to both of these releases.
- Friday will see the release of Blue / Pink Book GDP / balance of payment revisions. We don't think these will be fully incorporated into either the OBR's EFO Budget forecasts or the BOE's November MPR forecasts.
PIPELINE: Corporate Bond Update: $3.5B Philip Morris 5Pt Launched
Oct-27 17:22
- Date $MM Issuer (Priced *, Launch #)
- 10/27 $3.5B #Philip Morris $750M 3Y +43, $300M 3Y SOFR+66, $750M 5Y +58, $850M 7Y +68, $850M 10Y +78
- 10/27 $1.5B #Southwest Airline $750M 3Y +88, $10Y +128
- 10/27 $1B #Prologis Targeted Fund $400M +5Y +70, $600M +10Y +90
- 10/27 $1B #Lloyds PerpNC10 6.625%
- 10/27 $1B #DNB Bank 6NC5 +77
- 10/27 $500M Kaiser Aluminum 8.3NC3.3 6%a
- 10/27 $Benchmark Aker BP 10Y +160a
- 10/27 $Benchmark Turkiye 11Y 7.15%
- 10/27 $Benchmark Procter Gamble 7Y +55a, 10Y +60a
- 10/27 $Benchmark HCA Inc 5Y +110a, 7Y +120a, 10Y +130a, 30Y +150a
- 10/27 $Benchmark Sanofi 2Y +45a, 2Y SOFR, 3Y +50a, 3Y SOFR, 7Y +70a
- 10/27 $Benchmark Amphenol 2Y +60a, 2Y SOFR, 3Y +70a, 5Y +80a, 7Y +90a, 10Y +95a, 30Y +110a
- 10/27 $Benchmark America Airlines investor calls
- Expected Tuesday
- 10/28 $2B VoltaGrid 5NC2
- 10/28 $Benchmark Republic of Finland 5y +40a, 5Y SOFR
LOOK AHEAD: Tuesday Data Calendar: House Prices, Regional Fed, 7Y Note Auction
Oct-27 17:08
- US Data/Speaker Calendar (prior, estimate)
- 10/28/2025 9:00 FHFA House Price Index MoM (-0.1%, -0.1%)
- 10/28/2025 9:00 S&P Cotality CS 20-City MoM (-0.07%, -0.10%), YoY (1.82%, 1.40%)
- 10/28/2025 10:00 Richmond Fed Mfg Index (-17, -10)
- 10/28/2025 10:00 Conf. Board Consumer Confidence (94.2, 93.4)
- 10/28/2025 10:30 Dallas Fed Services Activity (-5.6, --)
- 10/27 1130 US Tsy $95B 6W & $50B 52W bill auctions
- 10/27 1300 US Tsy $44B 7Y Note auctions (91282CPF2)
- Source: Bloomberg Finance L.P. / MNI
