EUR – Quiet o/n as we continue to work a few of the weak shorts out of system after the continued fail to break below 1.2880. Saw strong demand from corp, model and ctas yesterday but fresh selling against the top of this 1.2880/1.300 range capped us. On the day feel that 1.2925/30 should hold in the short term then 1.2880 key below – topside 1.2980/00 contains offers with stops only above 1.3030. I think we continue to whip around on a 1.29 handle for the time being.
GBP – No UK data today. Month end and potential for some one-off flows to distort price action later. Our model suggests USD buying against both the pound and the Eur. I’ll be keeping things tight going into this afternoon and trade around the fix. Level wise, cable should be confined to a 1.6000-1.6110 range, with 1.5980-1.6145 the broader band around that. EUR/GBP behaving well, bouncing away from support at 0.8000 and maintaining its bid tone. We stopped just shy of my target of 0.8080 but I’ve squared longs and look to re-buy 0.8030-40.
JPY – Saw some gd selling yesterday 35-45 lvl from a vareity of diff a/cs however we held in there very well, japanese banks the main buyers. Today we open up on back of some gd RM and corp demand in asia and talk of demand at month end. I think we remain in a 79.30/80 range on the day – overal i like to buy dips still , ideally on a stop run below 79.30 – staggering bids 79.00-78.60
AUD/NZD/CAD – another strong domestic data print out of AU overnight, but still this wasn’t enough to take us through range highs with the 1.04 level proving formidable resistance for now. We still see very good supply above, this level should cap us initially today with mth-end supply to be broadly USD-positive. We do see some decent stops building above though, 1.0420/40 seems to be the level. Will look to re-sell AUDCAD round 1.0380/90/00, a clear chop through 1.0440 makes sense to me. We see some offers lining up in USDCAD round 1.0010/20, nothing below until we hit some stops sub 0.9970 which more or less coincide with the 100dma. CAD GDP to be released at 12.30pm, this will remain the key domestic focus for the day. We still see supply above in the bird, 0.8235-50 should cap any rally in the day. Remain square AUDNZD, can’t see any genuine opportunities at current levels and in the absence of domestic data.
Scandies – The Nok should grab the focus today with retail sales and unemployment data at 9.00. Norges bank at 13:00 is eagerly awaited and it feels as if the market is looking, (and is positioned) for a more dovish stance. Risks seem slightly skewed for a more neutral rhetoric and a move lower in EUR/NOK. Levels at 7.4800-7.5000 should be tough to crack above, with 7.4150 and 7.3500 support levels to watch. I’m reluctant to go into the announcement short of NOK with the market positioned as it. EUR/SEK seems to be a sell on rallies now that some better macro economic data has calmed nerves. 8.6400-8.6600 should harbour supply with 8.5500 good support.
Barclays Capital