US Brief: RBNZ keeps the key rate unchanged at 3.50 %. Scottish newspaper Daily Record reports latest IndyRef poll at 53 % No, 47 % Yes, excluding undecided. BoE's Weale said voted for rate rise in August because he expected inflation to be higher than BoE forecast. BoE's Carney repeats point where rates need to rise has moved closer. SNB says extrea measures will be taken if needed and could include negative rates. Nomura forecasts USD/JPY at 112 year-end and 120 at end of 2015.
Global Markets: S&P and DJIA closed 0.35 % higher. US 10 year yield at 2.54. Gold at $1250, Silver at $18.98, Crude Oil at $91.80.
FX Overview: EUR/USD opened in NY around 1.2930 and hit a low of 1.2882 amid USD/CHF strength after the SNB comments. Fast money names sold the break of 1.29 and stops below got triggered, but momentum waned away quickly. The pair bounced from there and eventually moved back to 1.2920 in early Asia. Offers are resting in front of the 1.2950 level, while bids at 1.2880 said to be solid. Intraday stops through 1.2960/65. US leveraged funds were noted sellers of EUR/AUD in the early NY session as the pair failed to reach 1.42 resistance. EUR/GBP got under pressure as well, with the bids at 0.7980 filled easily and stops cleared down to 0.7960. Next support lies at 0.7925, which is last Friday's close.
Cable rallied as the latest poll surprisingly showed a 53 % for No and 47 % for Yes, excluding the "Undecided"-votes. The pair rallied to 1.6228, which is the weekly high posted on Monday, and stalled there. Not sure what to think about the Cable at the moment. There are several more polls ahead before the final vote comes out on September 18th, so it will stay very volatile with whipsaw price action. The next major resistance is Friday's close of 1.6320, while support lies at 1.6150 and then 1.6120.
USD/JPY extended gains and reached a high of 106.87 earlier. NY saw good demand from macro funds and other leveraged names, as well as buying from real money funds. Asia thinks importers will continue to have strong demand for the pair and keep their bids close. Good intraday support at 106.50-55, while option-related supply pre-107 capping the topside so far. However, it's likely just a matter of time before that option barrier get's cleared as well.
After the heavy selling in Asia and Europe, AUD/USD was finally able to get some rest. It started in NY at 0.9140 and slowly moved towards 0.9165. Flows were rather light, but AUD-demand in the crosses (most notably EUR/AUD selling) helped a bit. The pair dropped sharply together with the Kiwi at 21:00 GMT, as the RBNZ released their statement, but that move has been fully retraced now. Key intraday support at 0.9110 and 0.9080, while key resistance lies now at 0.9190/0.92.
Short-term specs got squeezed out of their long positions in USD/CAD as the pair hit the stops sub-1.0950. The failure to close above 1.10 and sustain gains will likely cause some further position covering from longs and perhaps pave the way for a test of 1.0880 support.
The Kiwi dropped to 0.8180 after a more dovish RBNZ than expected. The RBNZ's 90-day interest rate forecast was lowered by 49bps, while the market was expecting only 30bps. The forecast implies the next hike will be in the second quarter of 2015 and a total of 100bps in rate hikes for the rest of the tightening cycle. Despite the recent drop in the Kiwi, the RBNZ noted that the "current level remains unjustified and unsustainable".
Looking ahead, we have Australian employment data and Chinese inflation figures at 01:30 GMT.
Good luck!
Global Markets: S&P and DJIA closed 0.35 % higher. US 10 year yield at 2.54. Gold at $1250, Silver at $18.98, Crude Oil at $91.80.
FX Overview: EUR/USD opened in NY around 1.2930 and hit a low of 1.2882 amid USD/CHF strength after the SNB comments. Fast money names sold the break of 1.29 and stops below got triggered, but momentum waned away quickly. The pair bounced from there and eventually moved back to 1.2920 in early Asia. Offers are resting in front of the 1.2950 level, while bids at 1.2880 said to be solid. Intraday stops through 1.2960/65. US leveraged funds were noted sellers of EUR/AUD in the early NY session as the pair failed to reach 1.42 resistance. EUR/GBP got under pressure as well, with the bids at 0.7980 filled easily and stops cleared down to 0.7960. Next support lies at 0.7925, which is last Friday's close.
Cable rallied as the latest poll surprisingly showed a 53 % for No and 47 % for Yes, excluding the "Undecided"-votes. The pair rallied to 1.6228, which is the weekly high posted on Monday, and stalled there. Not sure what to think about the Cable at the moment. There are several more polls ahead before the final vote comes out on September 18th, so it will stay very volatile with whipsaw price action. The next major resistance is Friday's close of 1.6320, while support lies at 1.6150 and then 1.6120.
USD/JPY extended gains and reached a high of 106.87 earlier. NY saw good demand from macro funds and other leveraged names, as well as buying from real money funds. Asia thinks importers will continue to have strong demand for the pair and keep their bids close. Good intraday support at 106.50-55, while option-related supply pre-107 capping the topside so far. However, it's likely just a matter of time before that option barrier get's cleared as well.
After the heavy selling in Asia and Europe, AUD/USD was finally able to get some rest. It started in NY at 0.9140 and slowly moved towards 0.9165. Flows were rather light, but AUD-demand in the crosses (most notably EUR/AUD selling) helped a bit. The pair dropped sharply together with the Kiwi at 21:00 GMT, as the RBNZ released their statement, but that move has been fully retraced now. Key intraday support at 0.9110 and 0.9080, while key resistance lies now at 0.9190/0.92.
Short-term specs got squeezed out of their long positions in USD/CAD as the pair hit the stops sub-1.0950. The failure to close above 1.10 and sustain gains will likely cause some further position covering from longs and perhaps pave the way for a test of 1.0880 support.
The Kiwi dropped to 0.8180 after a more dovish RBNZ than expected. The RBNZ's 90-day interest rate forecast was lowered by 49bps, while the market was expecting only 30bps. The forecast implies the next hike will be in the second quarter of 2015 and a total of 100bps in rate hikes for the rest of the tightening cycle. Despite the recent drop in the Kiwi, the RBNZ noted that the "current level remains unjustified and unsustainable".
Looking ahead, we have Australian employment data and Chinese inflation figures at 01:30 GMT.
Good luck!
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