FOREX: USD Index Lower, But Remains Anchored by 50-dma
Aug-28 15:49
- Having started Thursday trade on a more stable footing, the USD faded Thursday, putting the USD Index into negative territory - although remaining anchored by the 50-dma of 98.061 throughout. Further Fed independence questions follow the counter-suing of President Trump from Fed's Cook - leaving a notable question mark over the make-up of the FOMC later this year.
- Meanwhile, a renewed phase of USD sales pressured USD/CNH to new pullback - and year-to-date lows - of 7.1212. Much market focus remains on the PBOC fix overnight, which was marked higher (USD/CNY lower) relative to expectations - making for the strongest CNY fix since November of last year (down to 7.1063 from 7.1108).
- The stronger CNY fix provides more evidence that Chinese authorities are endorsing and pursuing strength in the currency in the context higher global trade tensions (Mexico are set to join the US in raising tariffs on Chinese imports) and as China's top trade negotiator Li Chenggang has travelled to Washington this week for talks with US officials. While no groundbreaking trade deal news is expected, it is a further sign of warmer relations, and may set up a Trump-Xi summit later this year.
- Datapoints pick up notably on Friday, with Japanese jobless data, prelim CPIs from France, Italy and Germany keeping markets busy ahead of the US open, with July PCE, trade balance, MNI Chicago PMI and UMich sentiment data set to follow.
- Fed's Waller is set to speak after the market close today - a leading contender for the next Fed Chair role and now one of the outright doves on the FOMC, there are two-sided risks to market reaction. Whilst there is a low bar to him surprising hawkishly vs prior comments (especially if he offers stronger pushback against recent independence challenges), it's worth noting that his dissenting statement warning on labor market stresses came just before the weak payrolls report. Kalshi betting has for a few weeks now had Waller as the lead contender for Fed Chair, with 30% chance.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
FED: US TSY 2Y FRN AUCTION: HIGH MARGIN 0.159%; ALLOTMENT 33.43%
Jul-29 15:32
- US TSY 2Y FRN AUCTION: HIGH MARGIN 0.159%; ALLOTMENT 33.43%
- US TSY 2Y FRN AUCTION: DEALERS TAKE 39.44% OF COMPETITIVES
- US TSY 2Y FRN AUCTION: DIRECTS TAKE 0.83% OF COMPETITIVES
- US TSY 2Y FRN AUCTION: INDIRECTS TAKE 59.73% OF COMPETITIVES
- US TSY 2Y FRN AUCTION: BID/CVR 2.81
FED: US TSY 2Y FRN AUCTION: NON-COMP BIDS $25 MLN FROM $30.000 BLN TOTAL
Jul-29 15:15
- US TSY 2Y FRN AUCTION: NON-COMP BIDS $25 MLN FROM $30.000 BLN TOTAL
US TSYS: SOFR/Treasury Option Update: Put Volume Climbs
Jul-29 15:10
- +20,000 TYU5 108.5 puts, 3
- +18,000 SFRZ5 95.68 puts, 1.25 ref 96.09
- +8,000 SFRH6 95.68 puts, 2.0 ref 96.305
