Monday 13 March 2023
Troubled US banks have been firmly in the news last week and a bailout announced last night settling markets briefly but the uncertainty continues. Deposit holders of Silicon Valley Bank and Signature Bank will have access to their funds while shareholders and certain unsecured debtholders will not be protected, and a new US Federal Reserve facility was announced with $25 billion from the ESF to underpin bank deposits. In the UK the BOE and government have agreed the sale of SVB UK to HSBC.
Some good two-way business again for the Greenback on Friday after another positive beat for US NFP data helped stem some outflows but risk-off JPY and CHF demand notable again this morning and capping core pairs. Focus remains on the Central Banks with the ECB next up this Thursday and with the FOMC now on news blackout (hurrah!) ahead of their decision on 22nd. US CPI data tomorrow will be keenly observed for more clues. A reminder that US and Canadian clocks went forward 1 hour at the week-end. UK/Europe don't change for another 2 weeks.
Equities in retreat again this morning amid the ongoing fragile market sentiment while WTI capped into $77.50 this time and fallen to test $75.00-20 so far as risk tones remain soft. Gold has found support at $1850-60 now and testing $1900 as the rally continues amid the banking sector fallout and general uncertainty. Ukraine/Russia war continues to be the main geo-political elephant in the room with US/China tensions in the mix too.
Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels prior and be poised to execute.
GBPUSD: Capping into 1.2150 so far after the hold of 1.1980-00 yesterday on Friday amid some USD supply returning and generally perkier GBP tones. Currently back at 1.2075 with GBPJPY selling helping the retreat. Keep selling those rallies ! EURGBP: Capped into 0.8865 as some GBP demand returns but support/bids building 0.8820-30 now. Expect some more two-way trading as core pairs fluctuate. GBPJPY: The support line at 162.00 now history with sellers prevailing at 163.00 to send it down to 161.25 as the uncertainty/fickle sentiment continues and JPY finds renewed demand.
EURUSD: Holding the old 1.0580 line then 1.0650 amid the USD supply returning but capping into 1.0740 since.I remain a rally seller as my preferred side still but some caution required. USDJPY shorts have helped hedge re-sells here too early. USDJPY: Capping into 136.75 then 136.00 on Friday after the earlier cap at the strong 137.00 area beofre a sharp drop amid the USD supply and JPY risk-off demand double whammy. Further falling this morning to look at 133.25 as I type and some pips banked but keeping core shorts.
More detailed update available from mike@mspfx.co.uk
Interbank rates: 08.35 GMT
GBPUSD 1.2091
EURUSD 1.0705
EURGBP 0.8852
GBPEUR 1.1295
USDJPY 134.11
GBPJPY 162.17
GBPCAD 1.6584
GBPCHF 1.1023
GBPZAR 21.9595
GBPHKD 9.4103
EURCHF 0.9808
EURHKD 8.3277
AUDUSD 0.6658
NZDUSD 0.6185
USDCAD 1.3744
USDCHF 0.9162
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