FOREX: USD Only Slightly Lower Despite Risk Recovery, AUD and NZD Outperform
Mar-04 18:48
- Risk sentiment has stabilised on Wednesday, with crude prices comfortably off their most recent extremes and major equity indices rallying back strongly. Resultingly, it has been a considerably more stable session for G10 FX, although perhaps surprisingly, the USD index sits just 0.2% lower on the session and is consolidating much of the week’s prior advance.
- Understandably, the likes of AUD and NZD are recovering well and stand around 1.8% and 1.6% above their Tuesday lows respectively.
- For AUDUSD, bullish conditions remain intact after support at the 50-day EMA held yesterday, intersecting at 0.6925. Short-term parameters are well defined, with a cluster of significant resistance building between 0.7125-50. Overnight, AU GDP came in slightly above expectations. At face value this keeps March RBA tightening risks in play, as the central bank may view it needs to hike more to curb growth momentum, however, the detail showed slowing in private domestic demand versus Q3 outcomes.
- Several aspects have helped provide a moderate reprieve for the Japanese yen on Wednesday, allowing USDJPY to edge further away from yesterday’s 157.97 high. These include hawkish tilting remarks from BOJ Governor Ueda, lingering FX intervention risks and stalling momentum above the post-election highs above 157.75. Initial firm support for USDJPY lies much lower at 154.00, the Feb 23 low.
- Elsewhere, EUR, GBP and CHF all kept very narrow ranges against the dollar. Swiss CPI did little to move the needle, although it is worth noting that despite the Swiss Franc unwind from earlier in the week, EURCHF currently resides within 50 pips of the 0.9025 cycle lows – with the potential to test the SNB’s resolve.
- Second-tier European data will precede the ECB minutes on Thursday, before US jobless claims. All focus will then turn to Friday’s Us employment report.
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GBPUSD TECHS: Corrective Cycle
Feb-02 18:30
- RES 4: 1.3913 High Sep 14 2021
- RES 3: 1.3889 1.00 proj of the Nov 4 - Jan 6 - Jan 19 price swing
- RES 2: 1.3868 High Jan 27 and the bull trigger
- RES 1: 1.3814 High Jan 30
- PRICE: 1.3640 @ 16:09 GMT Feb 02
- SUP 1: 1.3623 Low Feb 02
- SUP 2: 1.3578 20-day EMA
- SUP 3: 1.3471 25-day EMA
- SUP 4: 1.3402 Low Jan 22
GBPUSD has pulled back from its recent highs. The move down is considered corrective and a continuation lower would allow a recent overbought condition to unwind. The initial firm support to watch is at the 20-day EMA, at 1.3578. Support at the 50-day EMA lies at 1.3471. The medium-term trend theme remains bullish. The bull trigger has been defined at 1.3868, the Jan 27 high.
PIPELINE: Corporate Bond Roundup: Oracle 8Pt Guidance Update
Feb-02 18:29
- Date $MM Issuer (Priced *, Launch #)
- 02/02 $Benchmark Oracle 3Y +95, 3Y SOFR, 5Y +115, +7Y +130, 10Y +145, 20Y +170, 30Y +180, 40Y +195
- 02/02 $2.6B #GE Vernova $600M 5Y +45, $1B 10Y +65, $1B 30Y +78
US: Immigration Grows As Liability For Trump And GOP
Feb-02 18:27
The Wall Street Journal reports that blowback from US President Donald Trump's hardline immigration stance "risks turning one of his signature issues into a liability" for Republicans in the midterm elections.
- The Journal reports a growing number of Americans, including those who voted for the president, are “souring on his immigration agenda amid tactics that have led to clashes with protesters in places including Minneapolis. The shifting view on Trump’s handling of immigration comes after he tapped into voters’ concerns around the issue to win back the White House.”
- Silver Bulletin reports, “The polls have not been kind to Donald Trump [last] week. As of today, his net approval rating in our average is down to -14.3. That’s better than his second term low of -15.0, but not by much.”
- “Drilling down into that number, the share of Americans who strongly disapprove of the job Trump is doing hit a second term high of 45.7 percent yesterday. Comparatively few Americans — 24.2 percent — strongly approve of Trump,” continues SB, speculating that Trump’s numbers might decline further in the coming days.
Figure 1: % View Among Voters on Trump’s Policy Areas
Source: Wall Street Journal
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Apr-24 20:29
