FOREX: USD/JPY Recovery Holds, Tariff Talk Keeps CAD Off Lows
Feb-27 10:14
- The greenback is firmer against all others early Thursday, however has edged off the best levels of the session, helping GBP/USD remain within range of yesterday's highs at 1.2716. Clearance back above here would resume the bull trend in the pair, opening levels last seen in mid-December.
- Tariff chatter continues to dominate the headlines, but their longer-lasting effectiveness appears to be dwindling. The floating of an extension to the tariff deadline for Canada and Mexico by one month has underpinned sentiment, but even the gains for US equity futures are more minimal at this stage. USD/CAD resumed its climb late yesterday, but the pair holds below yesterday's highs of 1.4368.
- USD/JPY is holding early gains through the first few hours of the London session. Notably, the pair has shown above a down trendline drawn off the Feb12 high on the 15min candle chart (Y149.54 last), the break above which saw volumes pick up, and price action accelerate. This keeps the JPY weaker against all others in G10, and while the progress this morning is inconsequential given the bearish trend that's dominated over the past two months - we look to Y151.75 as the key level for any recovery, marking the 20-day EMA. A break above here would be the first concrete technical signal of a trend change.
- Weekly jobless claims, durable goods orders, secondary GDP and the core PCE price index make for a busy US session, to be followed up swiftly by pending home sales and the Kansas City Fed Manufacturing Activity Index.
- The last of which will be carefully watched for any repetitions from the other regional Fed releases this week, all of which have indicated a sharp increase in business uncertainty as a consequence of tariffs and political uncertainty.
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STIR: SOFR Futures Blocks Seen In Recent Trade
Jan-28 10:13
Recent SOFR block flow lodged a few minutes apart:
- SFRU7 1,540 lots blocked at 95.995, looks like a buyer.
- SFRH8 1,159 lots blocked at 95.945, looks like a seller.
- SFRM8 1,000 lots blocked at 95.925, looks like a seller.
AUSTRIA T-BILL AUCTION RESULTS: 3/6-Month ATBs
Jan-28 10:13
| Type | 3-month ATB | 6-month ATB |
| Maturity | Apr 24, 2025 | Jul 24, 2025 |
| Allotted | E851mln | E822mln |
| Previous | E1.916bln | E1.198bln |
| Amount | E1bln | E1bln |
| Target | E1bln | E1bln |
| Previous | E2bln | E1.25bln |
| Avg yield | 2.525% | 2.410% |
| Previous | 2.790% | 2.800% |
| Bid-to-cover | 2.25x | 2.76x |
| Previous | 2.11x | 1.69x |
| Bid-to-offer | 1.91x | 2.27x |
| Previous | 2.02x | 1.62x |
| Previous date | Nov 26, 2024 | Oct 29, 2024 |
GILT AUCTION RESULTS: 1.125% Sep-35 linker
Jan-28 10:05
| 1.125% Sep-35 linker* | Previous | |
| Amount | GBP1.50bln | GBP1.50bln |
| Avg yield | 1.128% | 0.745% |
| Bid-to-cover | 3.12x | 3.39x |
| Avg price | 99.971 | 100.040 |
| Pre-auction mid | 99.955 | |
| Previous date | 10-Dec-24 | |
| Previous issue | GB00BMF9LJ15 |
