From the FXWW Chatroom: UST yields up, 10-year rose to 2.73%. Nikkei rose more than 1%, Usd goes bid for a change. Why the change? I think post-SOTU address, market looks to Fed and the FOMC showed more confidence that inflation will pick up. This opens up for March rate rise.
-Usd began the session firm then traders turned their attention to USDCNY for clues.
-UsdJpy advanced to 109.41, offers are mentioned atop 109.50, 109.70-75 and then 110.20’s. UsdJpy move then tracked the onshore Yuan.
-EurUsd slightly lower, not a big deal. Like I said in the past, market is unwilling to sell EurUsd. I suspect there are positive gamma play – option strikes maturing today at 1.2420 for Eur1bn, another Eur1.05bn at 1.2415 and Eur1.2bn at 1.2400. EurUsd then bounced back to 1.2420.
-AudUsd took on bids under 0.8050. These are from those who sold above 0.8100. Some technical guys are watching the trendline from Dec 11 2017, comes in at 0.8030. AudUsd bounced back above 0.8050, thanks to China.
-Our spot trader Jon highlighted the widening of spread between yields Aussie bonds and UST. He said at some point, spot will follow.
-Speaking in China, British PM Theresa May promised that freedom of movement for EU citizens coming to Britain will end on Brexit day in March 2019. EU has insisted that EU citizens would be free to settle in Britain until at least the end of 2020. Meanwhile, FT posted a story that the EU is threatening sanctions to stop Britain undercutting the continent’s economy after Brexit, including “tax blacklists” and penalties against state-subsidised companies.
-Usd began the session firm then traders turned their attention to USDCNY for clues.
-UsdJpy advanced to 109.41, offers are mentioned atop 109.50, 109.70-75 and then 110.20’s. UsdJpy move then tracked the onshore Yuan.
-EurUsd slightly lower, not a big deal. Like I said in the past, market is unwilling to sell EurUsd. I suspect there are positive gamma play – option strikes maturing today at 1.2420 for Eur1bn, another Eur1.05bn at 1.2415 and Eur1.2bn at 1.2400. EurUsd then bounced back to 1.2420.
-AudUsd took on bids under 0.8050. These are from those who sold above 0.8100. Some technical guys are watching the trendline from Dec 11 2017, comes in at 0.8030. AudUsd bounced back above 0.8050, thanks to China.
-Our spot trader Jon highlighted the widening of spread between yields Aussie bonds and UST. He said at some point, spot will follow.
-Speaking in China, British PM Theresa May promised that freedom of movement for EU citizens coming to Britain will end on Brexit day in March 2019. EU has insisted that EU citizens would be free to settle in Britain until at least the end of 2020. Meanwhile, FT posted a story that the EU is threatening sanctions to stop Britain undercutting the continent’s economy after Brexit, including “tax blacklists” and penalties against state-subsidised companies.
-AudCad is hovering above the 200-Day SMA, 0.9896 and this is also aiding UsdCad. Positioning index indicate short UsdCad and after yesterday’s GDP, macro and quant funds would want to add to that. Bids gather mid 1.22’s, sellers await above 1.2350.
Asians
-Asian traders are keeping close watch on the onshore CNY. Fixed today at 6.3045, spot opened at 6.2960, then slipped below 6.29 and corporate selling resumed. Low recorded on CFETS was 6.2868, USDCNY selling exhausted and returned to 6.29-handle.
-Usd/Asia first tracked the UST yields but when USDCNY broke lower, they turned towards onshore for direction.
-Watch this UsdKrw NDF, break of 1s NDF1077 will trigger some of stops.
View the latest market information in the FXWW Chatroom with a free trial.