FOREX: USD Index Holds JOLTS Rally, Hopes for US-China Breakthrough Dwindle
Jun-04 09:17
- The USD Index remains either side of the 99.00 handle, but is holding the majority of the rally off lows yesterday. Despite this recovery, the dollar remains well inside the downtrend drawn off the mid-May highs, with the firm downward bias in the 50-dma cementing the recent momentum lower.
- EUR trades off the overnight lows, either side of 1.1400 headed into the NY crossover having failed to make progress above 1.1455 yesterday. A stabilisation in the long-end of the EGB curve is helping contain the currency, although trade tensions and the risk of headlines remain at the forefront. EU's Sefcovic this morning stated that talks with the US are going in the right direction "at pace" - however markets are growing increasingly used to the slow progress made in negotiations with the White House.
- Similarly, Trump posted overnight that the Chinese President Xi is "extremely hard to make a deal with" - hampering sentiment somewhat, but the lack of follow through for currency markets is the latest signal that expectations for a near-term breakthrough are limited.
- The Bank of Canada rate decision takes focus going forward, with markets expecting no change on rates from the Bank although a not insignificant minority see risks of a further dovish tilt at the Bank. Markets see the BOC in a position to wait for further developments in the US-Canada trade dispute before pulling the trigger on further moves, incoming economic data have tilted toward a further hold. In particular, better-than-expected GDP and a pickup in core inflation should tilt the balance toward a hold.
- US ADP Employment Change is a calendar highlight, with the ISM services index for May set to follow. Markets continue to watch for any signals ahead of Friday's nonfarm payrolls print from the data, particularly in the context of yesterday's stronger-than-expected job openings numbers. Fed's Bostic & Cook are set to moderate a session at the Fed Listens event series.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EQUITIES: Large Stoxx600 Option trade
May-05 09:11
SXXP (16th May) 550c, bought for 0.70 in 14k.
AUD: Another push higher for the Aussie
May-05 08:57
- The Aussie finds another round of demand, the G10 worst performers are the USD, CAD, GBP and the SEK in that order.
- The AUD is up across all the majors, putting aside the TWD which is up 1.60%, with Overnight desks suggesting some Exporter demand in TWD.
- Next immediate support in EURAUD is seen at 1.74536 (prices are according to Bloomberg), the very short term 76.4% retracement taken from the 2nd April Tariffs day.
(Chart source: MNI/Bloomberg).
OPTIONS: Expiries for May05 NY cut 1000ET (Source DTCC)
May-05 08:53
- EUR/USD: $1.1073(E2.4bln), $1.1100($1.5bln), $1.1120-25(E1.1bln), $1.1190-00(E2.0bln), $1.1285-00(E3.0bln), $1.1400(E636mln)
- GBP/USD: $1.3100-20(Gbp529mln)
- EUR/GBP: Gbp0.8525(E740mln)
- AUD/USD: $0.6500(A$509mln), $0.6550-60(A$1.0bln), $0.6635-45(A$1.1bln)
- USD/CAD: C$1.3865-70($2.6bln)
Trending Top
Jan-30 21:43
Jan-30 21:11
