Tuesday 9 January 2024
In a market still seeking direction we've seen some USD supply helped by a fall in oil and hence inflation outlook after Saudi Arabia cut its oil prices plus US NY Fed data showed marked reduction in inflation expectations. It doesn't need much to move these fickle markets but for the moment this is the current focus but some USD demand returning this morning as the jury remains out.
Meanwhile the Ukraine/Russia war and the Red Sea disruptions/fallout continue to accelerate while the ongoing Middle East Israel/Hamas back-story casts its own shadow over markets and yet, imnho, to reveal its full impact. Data wise attention turns to US CPI on Thursday.
Equities rallied in NY amid the reduced inflation scenario but dropping back this morning with the jury still out on the speed of cuts by FOMC et al. WTI found some support at $70.50-60 this time amid the Red Sea concerns after the Saudi-led retreat from $73.50 and now back at $71.80 but with sellers poised still. Gold ranging tightly still but in a softer $2015-40 for the moment as the jury remains out.
GBPUSD: Capping into 1.2770 in yesterday's rally but sellers prevailing again up there and back down to 1.2725 this morning. I remain poised for further rally sells when momentum fades but patience still required. EURGBP: Capping at 0.8620 but holding the pivotal 0.8580-85 area in the retreat as the CB jury remains out. GBPJPY: Mixed risk tones saw the pair capping into 184.00 again but holding 183.00-20 still. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets.
EURUSD: Support coming in at 1.0930 but capping at 1.0980 this time where we also have large option interest tomorrow. Speculation continues that the ECB is under pressure again to cut sooner rather than later. I remain a rally seller.
USDJPY: Finding support around 143.40 in the latest retreat after capping at 144.65. We're ranging overall still for the moment as conjecture remains on BOJ normalization.I remain a rally seller as preferred side overall and remain poised when momentum fades but caution still required for the moment.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.48 GMT
GBPUSD 1.2733
EURUSD 1.0948
EURGBP 0.8600
GBPEUR 1.1630
USDJPY 144.00
GBPJPY 183.41
GBPCAD 1.7007
GBPCHF 1.0815
GBPZAR 23.7162
GBPHKD 9.9167
USDCHF 0.8494
EURCHF 0.9300
EURHKD 8.5268
AUDUSD 0.6705
NZDUSD 0.6250
USDCAD 1.3362
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