Wednesday 22 November 2023
Nothing hawkish in the the FOMC Minutes or US housing data but bond yields have steadied and with markets still second-guessing the US Fed the Greenback has found a few buyers with no fresh downward impetus and some profit-taking into the long US week-end. Plus as I've been saying this week if the Fed are at the top of the hiking cycle then so are most of the other major Central Banks too and we've seen some notable EUR supply in the past 24 hours after various ECB comments.
The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving them atm. Ignore at your peril though. Another reminder that it's US Thanksgiving week culminating in a long week-end so on the data slate we have US weekly jobs data a day early plus Durable Goods too both at 13.30 GMT. BOC Governor Macklem speaks at 16.30 GMT. UK Autumn Statement shouldn't spring many surprises/impact GBP.
Equities dipped then rallied in NY and been steady in Asia and early European trading. Similar story for WTI whichhas seen good two-way business between $77.00-$78.00 with global demand concerns continuing despite some recent OPEC+ supply cut comments. Gold found a base at $1985 once it broke up through amid the general change in sentiment and posted $2007 before capping but bids coming in at $1995 for the moment as the jury remains out.
GBPUSD: Holding 1.2500 this morning in the USD-led retreat after capping into 1.2560 yesterday. In a reverse trend from past couple of days per notes above the retreat has been tempered by some GBPJPY demand too as USDJPY rllies quicker. I remain poised for further rally sells when momentum fades but still required for the moment. EURGBP: Support at 0.8730 broken amid the general EUR supply and now capping there as we test 0.8700. More two-way expected amid the core pair fluctuation/CB rhetoric. Some options very much in play today too. GBPJPY: Basing at 184.50 as USD sentiment swings back and USDJPY rallies strongly helped by some steady risk tones. Sellers prevailing at 187.00 for the moment.
EURUSD: Support around 1.0880 in this morning's retreat after breaking down through 1.0920 amid the USD demand. I remain a rally seller overall still as we continue to range tightly but caution still required for the moment. Large options in play.
USDJPY: A decent turnaround after finding a 147.00 then 147.30-50 base yesterday and posting 149.35 amid USD demand/JPY supply returning. I remain a rally seller as preferred side overall at these still elevated levels.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.44 GMT
GBPUSD 1.2510
EURUSD 1.0884
EURGBP 0.8700
GBPEUR 1.1493
USDJPY 149.31
GBPJPY 186.81
GBPCAD 1.7164
GBPCHF 1.1080
GBPZAR 23.4424
GBPHKD 9.7453
USDCHF 0.8855
EURCHF 0.9639
EURHKD 8.4815
AUDUSD 0.6539
NZDUSD 0.6018
USDCAD 1.3725
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