FOREX: USD Index Set to Close at Unchanged Levels This Week
Aug-29 16:53
- The USD index has edged lower on Friday, as the stagflationary picture painted by the U.S PCE & Chicago PMI data as well as ongoing uncertainty surrounding Fed independence weigh on the greenback. This has culminated in the dollar index returning to very similar levels to last week’s close.
- Overall, markets are adhering to the most recent dovish tilt from the Fed, however, the significance of the upcoming US data (NFP and CPI) before the September meeting, is keeping bearish dollar momentum in check for now.
- NZDUSD strength stands out today, as the pair extends its bounce from firm pivot support at 0.5800 to around 1.8%. However, as bearish trend conditions remain overall, this might suggest that good supply is seen into 50-day EMA resistance around 0.5930. There have been some primary signs on Friday of momentum stalling above 1.1100 for AUDNZD, however, look for dips back towards 1.1000/1.1030 to be well supported.
- For the majors, USDJPY has been happy to oscillate either side of 147.00, while the late dollar weakness has helped propel EURUSD back to the 1.17 handle. For the latter, French political concerns leave us moderately lower on the week, however, a false break of key 50-day EMA support on Wednesday keeps bullish trend conditions firmly intact for now.
- GBP remains a relative underperformer to end the week, remaining down 0.07% at 1.3500 despite a bounce from 1.3446 session lows. This dynamic has allowed EURGBP to extend its most recent recovery, to test resistance at 0.8674. A break above this level would signal a stronger reversal, placing the cross at its highest levels in three weeks.
- Next week’s calendar will undoubtedly be centred around the US employment report on Friday. Elsewhere, US ISM PMIs are also scheduled, as well as Australia GDP and Swiss CPI.
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OPTIONS: Sonia Leans To Upside, Euribor To Downside Wednesday
Jul-30 16:52
Wednesday's Europe rates/bond options flow included:
- ERZ5 98.12/98.06/98.00 put fly paper paid 0.5 (vs. 98.13) on 5K
- ERZ5 97.87 puts paper paid 1.0 on 18K
- SFIQ5 96.15/96.20cs, bought for 0.6 in 5k
LOOK AHEAD: Thursday Data Calendar: Weekly Claims, Core PCE, Chicago PMI
Jul-30 16:37
- US Data/Speaker Calendar (prior, estimate)
- 07/31 0730 Challenger Job Cuts YoY (-1.6%, --)
- 07/31 0830 Initial Jobless Claims (217k, 223k)
- 07/31 0830 Continuing Claims (1.955M, 1.953M)
- 07/31 0830 Personal Income (-0.4%, 0.2%), Spending (-0.1%, 0.4%)
- 07/31 0830 Real Personal Spending (-0.3%, 0.1%)
- 07/31 0830 PCE Price Index MoM (0.1%, 0.3%), YoY (2.3%, 2.5%)
- 07/31 0830 Core PCE Price Index MoM (0.2%, 0.3%), YoY (2.7%, 2.7%)
- 07/31 0830 Employment Cost Index (0.9%, 0.8%)
- 07/31 0945 MNI Chicago PMI (40.4, 42.0)
- 07/31 1130 US Tsy $95B 4W & $85B 8W bill auctions
- Source: Bloomberg Finance L.P. / MNI
OPTIONS: Expiries for Jul31 NY cut 1000ET (Source DTCC)
Jul-30 16:35
- EUR/USD: $1.1475-90(E1.3bln), $1.1490(E986mln), $1.1600-10(E2.6bln), $1.1650-70(E2.0bln), $1.1745-50(E1.1bln), $1.1800(E2.0bln)
- USD/JPY: Y146.00-20($1.5bln), Y147.40-50($728mln), Y148.00($522mln)
- AUD/USD: $0.6465(A$1.0bln), $0.6600(A$1.4bln)
- NZD/USD: $0.5965(N$505mln)
- USD/CAD: C$1.3670-75($1.0bln), C$1.3740($602mln)
- USD/CNY: Cny7.0700($1.4bln), Cny7.1500($897mln)
