USD/JPY: will it follow rate spreads? - Nomura

Ross J Burland FXStreet

Analysts at Nomura suggested to watch out for fixed income volatility.

Key Quotes:

"USD/JPY now appears to be moving in line with wider rate spreads. Correlation between rate spreads and USD/JPY is now increasing again."

"One notable difference from the January-February period is the still low implied volatility in the fixed income market, even after 10yr UST yields broke 3.0%."

"At the beginning of the year, increased volatility discouraged foreign investment in US bonds, including from Japan, but smoother rises in US yields may attract foreign demand more easily."

"As long as rises in foreign yields are smooth, further upside in USD/JPY and EUR/JPY is possible."

"Albeit at a low level, implied volatility in USTs and JGBs has risen since the middle of last week, and we will monitor moves in bond market volatility as we approach the forthcoming key central bank meetings."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD holds steady above 1.1850 in quiet session

EUR/USD stays defensive but holds 1.1850 amid quiet markets in the European hours on Monday. The US Dollar is struggling for direction due to thin liquidity conditions as US markets are closed in observance of Presidents' Day holiday.

GBP/USD flat lines near 1.3650 ahead of UK and US data

GBP/USD kicks off a new week on a subdued note and oscillates in a narrow range near 1.3650 on Monday. The mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important data releases from the UK and the US.

Gold corrects lower, tries to stabilize above $5,000

Gold started the week under bearish pressure and declined to the $4,960 area before staging a modest rebound. As trading volumes remain thin with the US financial markets remaining closed on Presidents' Day holiday, XAU/USD looks to stabilize above $5,000 ahead of this week's key data releases.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.