Thursday 13 April 2023
Yesterday's eagerly awaited US CPI data may have disappointed the hawks but not the algos as second-guesing the US Fed in next month's policy decision continues. We've seen some USD supply again on the generally softer reading with elements of the core reading not so great either although USDJPY is still looking a little underpinned helped by better risk sentiment JPY supply. US PPI data next off the ramp today at 12.30 GMT.
The latest Bank of Canada policy announcement brought the expected the rate change pause continuing amid cautious tones while this morning we've seen February UK GDP coming in at 0.0% vs 0.1% expected with a tiny decline in services and production matched by a similar rise in manufacturing.
Equities are off retreat lows once again per recent pattern and remain underpinned overall amid softenning rate hike tones while WTI has found a base at $81.30-50 now and rallied strongly before capping into $83.30-50 resistance on the current happy clappy sentiment. Gold has been trying to crawl back above $2020 but failing as I type. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China/Taiwan tensions in the mix too and now ongoing Middle East tensions.Oh, and North Korea giving Japan another missile close-shave too.
GBPUSD: Capping into 1.2520 this morning after finding good support into 1.2400 this time helped by GBPJPY demand again. I remain a rally-seller on this pair overall while we continue to range. EURGBP: Tightly bound again with 0.8820 now capping with support coming in at 0.8785-90 with decent option interest in play again. Expect more two-way business still. GBPJPY: A base again at 165.30-50 amid the better risk and soggy JPY tones but capping at 166.50-60 as markets remain fickle with sellers still poised when sentiment softens.
EURUSD: Support building at 1.0960-80 now with large option expiries in play between 1.0900-1.1000 and now through 1.1020 as I type. I remain a rally seller as my preferred side overall but caution required atm and equally a case for buying dips as I warned yesterday. USDJPY: Failing at 134.00 again and decent drop below 133.00 post-CPI where we also have decent option interest rolling off again but some from JPY supply notable again too. Some jobbing pips banked again in the tight range and I continue to favour rally sells overall.
More detailed analysis across a variety of pairs available from mike@mspfx.co.uk
Interbank rates: 08.28 BST
GBPUSD 1.2495
EURUSD 1.0998
EURGBP 0.8800
GBPEUR 1.1364
USDJPY 133.03
GBPJPY 166.28
GBPCAD 1.6778
GBPCHF 1.1157
GBPZAR 22.8510
GBPHKD 9.7531
EURCHF 0.9831
EURHKD 8.5855
AUDUSD 0.6723
NZDUSD 0.6230
USDCAD 1.3407
USDCHF 0.8940
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