US Brief: US Existing Home Sales -1.8 % vs +1.0 % expected, 5.05mln vs 5.20mln f/c. NY Fed President Dudley said sub-2.0 % inflation argues for patience on rates, inflation tame because of economic slack, expectations are subdued, growth abroad is weak. ECB President Draghi said ECB has reached lower bound interest rates, Euro-Area recovery is losing momentum, risk clearly on downside. Bank of Canada's Wilkins said Canada neutral interest rate in 3-4 % range, was 4.5-5.5 % before crisis. Wilkins said Canada may need loose policy even at full capacity and may need continued stimulus for recovery. RBS recommends selling AUD/CAD with a 0.9970 stop and 0.9510 target.
Global Markets: S&P 500 is down 0.80 %, DJIA lost 0.60 %, NASDAQ declined 1.10 %. Gold at $1218 (+0.10 %), Silver at $17.76 (-0.40 %), Crude Oil at $90.92 (-0.80 %). US 10 year yield at 2.56.
FX Overview: Flows were rather light again and most of the action happened in the commodity currencies. Nothing new from ECB President Draghi during his speech in front of the Committee, with his comments in line with the previous statements. Regarding the recent TLTRO take-up result, Draghi said that it was in line with ECB expectations. EUR/USD hit a low of 1.2815 after Draghi was finished as short-term specs were covering their long positions. The pair bounced from there, reaching 1.2840 earlier. Dealers still report decent bids in front of the 1.28 barrier option, as well as stops building beneath. To the topside, key intraday resistance now lies at 1.2867 (daily high) and then 1.2930. Overall sentiment remains EUR-negative, but the risk of short squeeze remains relatively high and selling rallies above 1.29 seems the better strategy rather than chasing this lower.
It was a quiet session for GBP/USD. The pair opened in NY around 1.6335 and remained in a 1.6325-60 range. Positioning is now far lighter and this will make it easier for GBP bulls to push Cable higher. However, overall USD-sentiment will make it difficult for the pair to build significant upside momentum, so focusing on the crosses is more favorable, especially buying GBP against the commodity currencies and the Euro.
USD/JPY started the NY session at 109.00, briefly fell to 108.87 and then reached a fresh daily high of 109.18, driven by demand from leveraged names and CTAs. The offers pre-109.20 mentioned previously capped the topside however, and the pair is currently testing the 108.80 level. Intraday stops through 108.70, but good bids resting between 108.50-60.
AUD/USD managed to bounce ahead of the 0.8850 barrier option and slowly rose towards 0.8880. Focus is now on the Chinese HSBC Manufacturing PMI release at 0145 GMT (2145 ET), with the market expecting a 50.0 print. A slightly worse number is probably already priced in after today's decline, so losses would be limited, but a larger miss would without doubt accelerate the downside momentum in AUD and pave the way for a test of the 0.8800 support level. USD/CAD extended gains after comments from BoC's Wilkins, hitting 1.1036 earlier. Flows were decent with buying coming from leveraged names and real money funds. Corporate offers got hit on the way up, but were not much of an obstacle. Another test of 1.11 seems imminent.
Looking ahead, the Chinese PMI figure will be the main event as mentioned. Prior to that, Fed's Kocherlakota will speaking at 2330 GMT (1930 ET).
Good luck!
Global Markets: S&P 500 is down 0.80 %, DJIA lost 0.60 %, NASDAQ declined 1.10 %. Gold at $1218 (+0.10 %), Silver at $17.76 (-0.40 %), Crude Oil at $90.92 (-0.80 %). US 10 year yield at 2.56.
FX Overview: Flows were rather light again and most of the action happened in the commodity currencies. Nothing new from ECB President Draghi during his speech in front of the Committee, with his comments in line with the previous statements. Regarding the recent TLTRO take-up result, Draghi said that it was in line with ECB expectations. EUR/USD hit a low of 1.2815 after Draghi was finished as short-term specs were covering their long positions. The pair bounced from there, reaching 1.2840 earlier. Dealers still report decent bids in front of the 1.28 barrier option, as well as stops building beneath. To the topside, key intraday resistance now lies at 1.2867 (daily high) and then 1.2930. Overall sentiment remains EUR-negative, but the risk of short squeeze remains relatively high and selling rallies above 1.29 seems the better strategy rather than chasing this lower.
It was a quiet session for GBP/USD. The pair opened in NY around 1.6335 and remained in a 1.6325-60 range. Positioning is now far lighter and this will make it easier for GBP bulls to push Cable higher. However, overall USD-sentiment will make it difficult for the pair to build significant upside momentum, so focusing on the crosses is more favorable, especially buying GBP against the commodity currencies and the Euro.
USD/JPY started the NY session at 109.00, briefly fell to 108.87 and then reached a fresh daily high of 109.18, driven by demand from leveraged names and CTAs. The offers pre-109.20 mentioned previously capped the topside however, and the pair is currently testing the 108.80 level. Intraday stops through 108.70, but good bids resting between 108.50-60.
AUD/USD managed to bounce ahead of the 0.8850 barrier option and slowly rose towards 0.8880. Focus is now on the Chinese HSBC Manufacturing PMI release at 0145 GMT (2145 ET), with the market expecting a 50.0 print. A slightly worse number is probably already priced in after today's decline, so losses would be limited, but a larger miss would without doubt accelerate the downside momentum in AUD and pave the way for a test of the 0.8800 support level. USD/CAD extended gains after comments from BoC's Wilkins, hitting 1.1036 earlier. Flows were decent with buying coming from leveraged names and real money funds. Corporate offers got hit on the way up, but were not much of an obstacle. Another test of 1.11 seems imminent.
Looking ahead, the Chinese PMI figure will be the main event as mentioned. Prior to that, Fed's Kocherlakota will speaking at 2330 GMT (1930 ET).
Good luck!
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