BOE: STR usage increases again to GBP139.912bln; total BOE repo usage >GBP200bln

Net ILTR usage up GBP1.008bln on the week at GBP61.920bln (gross usage was GBP1.605bln this week)

Level A collateral sees the largest adjustment once again, up GBP1.036bln on the week. 

• The USD has drifted a touch higher on Tuesday as the imminent US/Iran agreement drags on and renewed ‘self-defence’ strikes by the US overnight dent the initial enthusiasm for risk we saw during yesterday’s session. The only partial reversal for energy prices still points to a cautiously optimistic market in favour of a deal being agreed, however, the USD certainly appears to be lacking conviction at this juncture.
• Positioning dynamics may be playing their part in NZD underperformance, as the market turns its focus toward the central bank decision tomorrow. NZDUSD has notably erased the entirety of yesterday’s bounce to trade at current levels of 0.5845, down 0.46% on the session.
• 20- and 50-day EMAs are capping the immediate topside ahead of 0.5900 for NZDUSD, while a double bottom at 0.5815 provides short-term support. Notably, AUDNZD has extended a very solid recovery from last week’s 1.2136 lows to print fresh cycle highs of 1.2256 this morning. The target here is 1.2344, the 61.8% retracement of the 2011-2020 range.
• Latest USDJPY price action has seen us test Friday's 159.23 highs, closing Monday's gap lower which signals bullish conditions remain intact. Post-intervention recovery highs stand at 159.34, which closely coincides with a retracement level at 159.38, and this area provides key short-term resistance. Clearance of that hurdle would put sights on 160.72, the Apr 30 high and key resistance.
• ADP weekly employment, some regional Fed sentiment indices, FHFA House Prices, and Conference Board Consumer Confidence are on the data calendar, while BoC's Vincent and ECB's Sleijpen are scheduled in terms of speakers.

• Latest USDJPY price action has seen us test Friday's 159.23 highs, closing Monday's gap lower which signals bullish conditions remain intact. Post-intervention recovery highs stand at 159.34, which closely coincides with a retracement level at 159.38, and this area provides key short-term resistance. Clearance of that hurdle would put sights on 160.72, the Apr 30 high and key resistance.
• Overnight, BoJ Deputy Himino said the Bank must adjust monetary policy appropriately to contain inflation, as real interest rates remain at low levels, though he did not elaborate on the timing or pace of further moves.
• The BoJ's underlying CPI index accelerated in April data also released overnight, remaining above the 2% target for a 19th straight month. BOJ officials are closely watching the measure to assess underlying inflation trends, however, previously monitored indicators have been slowing, complicating the case for further policy rate hikes.
• Recent verbal intervention (both Japan and US officials commented on speculative moves in the yen) will be keeping market participants very aware of further action to support the yen, however, the fundamental headwinds for the currency remain very clear, and have been exacerbated by talks of additional budget stimulus last week.
• Tokyo May CPI, scheduled for Friday, will headline the Japanese data calendar for this week, where a marginal pickup from April's 1.5% Y/Y is expected.