FOREX: USD Holds APAC Demand, CAD Left Isolated
Feb-26 10:18
- The greenback trades stronger headed into the NY crossover, holding the bulk of a phase of dollar demand through the Asia-Pac session - although European trade so far has been considerably more subdued. EURUSD highs over the past two sessions at 1.0525 and 1.0528 have fallen just shy of key resistance, building the significance of 1.0533, the Jan 27 high and an important reversal trigger.
- In contrast with the general stability in G10 FX through the open, USD/CAD remains well within range of the overnight highs, keeping the pair on track to post four consecutive sessions of gains and five consecutive sessions of higher lows.
- The significantly calmer MXN market shows it's Canada that markets see as the risk here - with Sheinbaum's frequent public commentary and several meetings between ministers clearly soothing any tensions and showing through in currency risk premia. Resistance to watch remains 1.4380, the Feb 10 high. A move above this hurdle would highlight an early reversal signal and would be a key consideration on prolonged uncertainty.
- US New Home Sales data is the scheduled data highlight Wednesday, with appearances from Fed's Barkin & Bostic and BoE's Dhingra - ahead of a slew of appearances for the RBA, as Hauser, Jones and McPhee all testify in front of lawmakers. The G20 finance ministers meeting is set to kick off in South Africa, at which Trump's approach to both global military security and global trade is the key focus. Any signs of discord here are unlikely to be received well by the White House - meaning any communique will draw market attention.
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US-RUSSIA: Kremlin Waiting For White House To OK Putin-Trump Call
Jan-27 10:14
Kremlin spokesperson Dmitry Peskov told reporters that Moscow is yet to receive signals from the White House about a meeting or call between Russian President Vladimir Putin and US President Donald Trump, noting a "certain amount of time" was needed before a meeting could take place, per Reuters.
- Comes after Peskov said on Friday: “Putin’s ready, we’re waiting for signals. Everyone is ready.”
- Putin said in an interview on Friday: "We have always said, and I want to emphasise this again, we are ready for these talks on the Ukrainian issue."
- In the interview, Putin appeared to offer Trump a sweetener, supporting Trump’s claims that the US presidential election was “stolen” and the Ukraine war could have been avoided if Trump were president: “...if they hadn't stolen victory from him in 2020, the crisis that emerged in Ukraine in 2022 could have been avoided."
- The comments are consistent with regular Kremlin comments signposting openness to talks, but the more conciliatory language appears to signal a more genuine pivot to reopening lines of communication than during the Biden administration.
- Putin's comments came after Trump issued his first threat to Russia since taking office: “If we don’t make a “deal,” and soon, I have no other choice but to put high levels of Taxes, Tariffs, and Sanctions on [Russia]...”
- Politico notes: “Putin and his inner circle aren’t taking Trump’s recent sanction threats seriously, instead seeing it as posturing ahead of actual direct talks about the war in Ukraine.”
US TSY OPTIONS: Larger Risk Reversal
Jan-27 10:12
TYH5 108.50/110.50 RR , bought the call for 17 in 30k (ref 109.03).
EQUITIES: EU Bank Index recovers from the low
Jan-27 10:12
- Despite the Risk Off tone, led by Tech, the Bank Index (SX7E) is doing better, trading circa flat on the day, now edging to session to close the opening gap.
- This chart remains one of the most interesting one at the start of 2025, with the next big level seen up to 163.34, the 2014 high.
- No surprises in seeing the Tech sector as the worst performer, (SX8P) has seen its biggest single move since 15th October, and looking to test the 800.00 level
