EUR/USD
The price action by the pair has been dominated by a touted option expiry at 1.3050, said to be of a significant size, for the 10am (1500BST) NY cut. In turn, the pair has oscillated around this mark for much of the session and settled with decent gains. In terms of EU related commentary, Spain's ruling centre-right People's Party won a key regional election in Galicia according to exit polls. (Newswires) The People's Party is set to retain its absolute majority and government in Galicia with 39 to 42 seats in the regional parliament. The Spanish debt market however, underperforms its peers in a modest reversal of the strong performance seen at the tail-end of last week, after Moody's affirmation. As such, Spanish yields are seen a touch higher across the curve, whereas the Italian counterpart is tighter to the German benchmark.
GBP/USD
Even though the pair mimicked the price action by EUR/USD for much of the session, the pair decoupled from its major counterpart and trended lower after what was said to be good sized options expired at 1500BST (NY cut). Attention remains firmly on the upcoming GDP report, which will likely prove to be a crucial factor for the MPC as to whether or not the APF needs to be raised in November or not.
USD/JPY
The JPY is seen markedly weaker across the board, with USD/JPY coming closer and closer to the 80.00 handle, a mark not struck since July this year. The moves follow a far weaker than expected trade balance release from the country, with analysts noting that the deteriorating exports picture reduces pressure on exporters to conduct USD-selling, and thus placing upward pressure on the USD/JPY pair.
