FOREX: USDJPY Consolidates 0.5% Gains, Markets Await US CPI
Dec-17 17:34
- It was a tale of two halves for the broad dollar index on Wednesday, with early recovery strength slowly dissipating through the US session. Intra-day swings continue to reflect the limited appetite ahead of the busy central bank docket and the key US CPI data release on Thursday. The DXY stands just 0.15% in the green as we approach the APAC crossover.
- Greenback gains have been most notable against the Japanese Yen, with USDJPY consolidating towards the upper end of the day’s range around 155.55. The post-NFP bounce totals around 1.1% as we approach Friday’s BOJ meeting, where a 25bp hike to the policy rate remains priced in.
- GBP also had significant swings on the session following the below-expectation CPI data earlier today. While the data cements the likelihood of a 25bp rate cut from the BOE tomorrow, the figures place particular emphasis for a dovish surprise on the vote split and the potential for dovish developments regarding 2026 pricing.
- GBPUSD briefly extended losses to around 0.8% to 1.3312 before the general dollar turnaround prompted spot to rise back to around current levels of 1.3390. Initial firm support is 1.3290, the 50-day EMA, of which a breach would highlight a possible technical reversal.
- For USDCAD, it is worth highlighting that yesterday’s dip following the US jobs data essentially matched the first primary target for the selloff, trading to within 3 pips of the September lows at 1.3727. Subsequently, price has been consolidating below the 1.38 mark, keeping short-term bearish trend conditions in place following the technical breakdown earlier in the month.
- In emerging markets, mounting political uncertainty is continuing to dominate short-term sentiment in Brazil, with price action today extending the USDBRL bounce from cycle lows to around 5%.
- Interest rate decisions from the Riksbank, Norges Bank, BOE and ECB highlight tomorrow’s docket, alongside the eagerly awaited release of US CPI.
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TARIFFS: UK "mulls options to retaliate" against EU steel trade barriers
Nov-17 17:31
"*UK MULLS OPTIONS TO RETALIATE AGAINST EUROPE OVER STEEL TARIFFS
*PEOPLE FAMILIAR DISCUSS UK PLANS FOR TARIFF RESPONSE TO EUROPE" - Bloomberg
This is in response to the EU reduction in import quotas announced on 7 October.
PIPELINE: Corporate Bond Update: $6B Morgan Stanley 3Pt Launch, Amazon Guidance
Nov-17 17:30
- Date $MM Issuer (Priced *, Launch #)
- 11/17 $6B #Morgan Stanley $2.35B 3NC2 +80, $650M 3NC2 SOFR+78, $3B 6NC5 +75
- 11/17 $Benchmark Amazon 3Y +30, 5Y +40, +7Y +47, 10Y +55, 30Y +75, 40Y +85
- 11/17 $Benchmark Enbridge 3Y +63, +5Y +80, 10Y +110
- 11/17 $Benchmark Smurfit Westrock Fin 10Y +135a
- 11/17 $900M #Consolidated Edison 30Y +103
- 11/17 $750M Molina Health 5.25NC2
- 11/17 $600M #AptarGroup +5Y +105
US 10YR FUTURE TECHS: (Z5) Resistance Remains Intact
Nov-17 17:17
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-04+ High Nov 14
- PRICE: 112-21 @ 17:15 GMT Nov 17
- SUP 1: 112-10 100-dma
- SUP 2: 112-06 Low Sep 25 and a reversal trigger
- SUP 3: 112-05 Trendline support drawn from the May 22 low
- SUP 4: 111-23 50.0% retracement of the May 22 - Oct 17 bull leg
Treasuries last week challenged resistance at the 113-02 level, an area of congestion since Nov 5. This hurdle remains intact, however, a clear move above it would be a bullish signal and shift focus on resistance at 113-18+, the Oct 28 high. A break would also cancel a short-term bearish theme. For bears, attention is on 112-10, the 100-DMA and 112-06, the Sep 25 low. Trendline support lies at 112-05.
