FOREX: US Index Holds Firm into Powell Appearance
Aug-22 09:21
- The USD Index hold firms early Friday, building on the closing gains from Thursday trade. Focus for the duration of Friday rests on the speech from Fed's Powell at the Jackson Hole Policy Symposium. With markets pricing 15-20bps of cuts for the September meeting, Powell's conviction on easing policy, or not easing policy, at today's speech could prove highly market-moving.
- GBP/USD printed a new pullback low alongside the European open, marking six consecutive sessions of lower highs and lower lows as the correction continues. Weakness in pair this week comes in the context of a bullish background condition. Recent gains resulted in a breach of 1.3589, the Jul 24 high, signaling scope for a climb towards 1.3636, the 76.4% retracement of the bear leg between Jul 1 and Aug 1.
- The very front-end of the USD vol curve has printed very minimal risk premium headed into Friday's Powell speech - potentially signalling that markets are looking through this year's Jackson Hole symposium as the trigger to revalue vols to the year's norms.
- Indeed, one-week EUR vols printed multi-month lows of 6.2 points earlier this week - the lowest of Trump's term in office so far - mirroring realised vols, that saw very little pick-up on recent US PPI and UK CPI surprises this week. Worth noting Powell's appearance coincides with the Friday 10am NY cut.
- Outside of Powell's appearance at 1500BST/1000ET, Canadian retail sales are due, with markets expecting a rebound after the particularly poor May reading. Fed's Collins and Hammack are also set to speak. Hammack's comments moved markets yesterday, after the Cleveland Fed rep talked against a September cut.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GREECE T-BILL AUCTION RESULTS: GTB results
Jul-23 09:21
| Type | 26-week GTB |
| Maturity | Jan 23,2026 |
| Amount | E500mln |
| Target | E500mln |
| Previous | E500mln |
| Avg yield | 1.71% |
| Previous | 1.75% |
| Bid-to-cover | 1.93x |
| Previous | 2.12x |
| Previous date | Jun 25, 2025 |
GILT AUCTION RESULTS: Solid 4.375% Jan-40 gilt auction
Jul-23 09:07
- It follows a well-received long-dated BOE APF operation on Monday.
- The yield tail was just 0.1bps, well below the 0.6-1.0bp range across the prior three re-openings in Feb, Apr and Jun.
- Bid-to-cover ratio of 3.69x also above the 2.58-2.89x prior range.
- A reminder that today’s auction was smaller (GBP3bln) than the last three re-openings (GBP3.25bln).
- The lowest accepted price of 92.946 was in excess of the 92.9385 pre-auction mid. The secondary price of the Gilt hasn’t seen much reaction following the results though, currently 92.935.
GILT AUCTION RESULTS: 4.375% Jan-40 results
Jul-23 09:03
| 4.375% Jan-40 Gilt | Previous | |
| Amount | GBP3.00bln | GBP3.25bln |
| Avg yield | 5.066% | 4.850% |
| Bid-to-cover | 3.69x | 2.88x |
| Tail | 0.1bp | 1.0bp |
| Avg price | 92.959 | 95.065 |
| Low price | 92.946 | 94.965 |
| Pre-auction mid | 92.939 | 95.052 |
| Previous date | 25-Jun-25 |
