Citi: G10 Flows: Kiwi in demand, GBP takes a breather
Unsurprisingly, turnover has been fairly low on the day given the Presidents Day holiday in the US and the upcoming Lunar New Year in Asia. That said, we have seen good demand in NZD following the release of better retail sales data overnight, and some GBP selling (notably against the EUR, presumably profit taking) ahead of key UK data later this week.
– USDJPY: Low turnover; 51% bias in favor of selling.
– EURJPY: Good turnover; clear bias in favor of buying.
– EURUSD: Low turnover; 52% bias in favor of selling.
– EURGBP: Very high turnover; 53% bias in favor of buying.
– GBPUSD: Good turnover; 56% bias in favor of selling led by leveraged and real money investors.
– USDCHF: Decent turnover; 55% bias in favor of selling.
– EURCHF: High turnover; 51% bias in favor of buying.
– AUDUSD: Good turnover; 52% bias in favor of selling with demand from real money and supply from banks and leveraged investors.
– NZDUSD: High turnover; clear bias in favor of buying led by real money investors.
– USDCAD: Decent turnover; no bias.
Citi:
A poor week for liquidity is seeing vol moves with very little flow and action interbank. The headlines are swaying the markets with Greece stories pushing the front end EUR block vols back up after the slide yesterday in London morning.
EUR spot – our spot desk notes, ‘The correction higher in EURUSD seems over and the downtrend may have restarted. 1.1270 is the line in the sand a move below opens up a move to new lows below 1.1100.’
CitiFX Technicals highlights that EURUSD remains vulnerable especially as German yields remain low while US yields have moved higher. The hold of support on the EURUSD 1 month implied volatility chart also warns that the consolidation may be ending. The EURG10 Index is forming a short term double top indicating broad EUR weakness across G10.
OPTIONS-Larger DTCC expiries for NY cut
EUR/USD: 1.1335 (292M), 1.1350 (311M), 1.1450 (1BLN).
USD/CHF: 0.9000 (900M). EUR/CHF: 1.0400 (300M)
AUD/USD: 0.7715 (404M), 0.7750 (305M), 0.7800-05 (400M), 0.7890 (703M)
USD/CAD: 1.2430 (290M), 1.2500 (646M)
JP Morgan thinks Greek banks run out of collateral in about three months. Greek banks are losing around €2 billion ($2.27 billion) of deposits a week, a pace of outflows which, if maintained, will see them run out of collateral for new loans in 14 weeks, according to JP Morgan.