PLN FX: EURPLN very subdued in spite of the concerns in the market elsewhere. We tried a few timesto break the 200 day ma (4.20) yesterday without success, but I do think complacency is setting in here.With the USD starting to perform in the G10 space I think the model inflows may start to slow/reverse whichcould leave EURPLN vulnerable. For now however I sit square looking to get long on any close above4.2050. No local data to watch.
CZK FX: The lower CPI print yesterday has reversed the EURCZK grind lower. The number (along with theEURCZK dip post CNB) keeps the intervention story in play, and either way I only see selling of EURCZK aconsequence of position unwinds. The market certainly isn’t long EURCZK here, but 25.50/70 looks to bethe range to play for now. I have seen real money names buying EURCZK today for the first time in quite awhile. I added to longs today and will look to take some off on moves towards 25.70 from here.
TRY : Meaningless overnight session with USDTRY trading on 1.9800/1.9890 range randomly. As we aregetting closer to the holiday next week, moves started to get weird with small two way interest in USDTRY.Yesterday we have seen once again models selling USDTRY vs fast money investors and got given $50mio on the net. Market is slightly short TRY, close to flat, but I heard some talks on the street about freshlong TRY positions to use the opportunity to trade USDTRY without local corporates next week. On theother hand, looking to my list of enquiries I still can feel market is bearish TRY & waiting for a bounce backtowards 2.0000. Without any local data until tomorrows current account deficit, technicals will talk. Watch1.9680/1.9720 below, 1.9830 pivot level and 2.0060/2.0080 resistance zone above…
ZAR: Spot continues to trade a tight range (9.95-9.9950 this morning).. I continue to lack convictionat present – on one hand you have a mkt long $’s and the technical’s are encouraging for a movelower in spot… on the contrary, I think the fundamentals are poor (twin deficits, labour tensions, MTcompetitiveness, stagflation… MTBS will likely see growth downgraded etc) but most of this is pricedisn’t it? Spot has all but lost momentum at present.. Locally we have mining, gold and manufacturingproductivity today.. I’m flat here and looking to lean wither side of 9.90-10.10 range. Tactical nimble etc.
ILS: Some relief for the shekel this mng, given briefly below 3.56… Locals report outflows and I’ve seenmodels buying $’s this week.. Of course the BOI remains virtually omnipresent – buying dollars daily.Notably in Sept BOI bought $835M i.e. more than the 235M to offset gas related inflows.. 30% of GDPcomes from exports so exporters are the other main consideration here. I like the ccy stronger here andlook to add infront of 3.60 with a 3.50 then 3.40 goal.
HUF: Sleepy start for the forint this mng.. flirting with 296.00 and lacking inspiration. Presently, mostaccount I speak to are sidelined in the FX space, its mainly models we are seeing in the CE3 space– unbridled enthusiasm to sell USD… I’m bearish the forint with the CB rate cutting, centralisation ofpower, policy unpredictability etc.. But admittedly a lot of this is in the price. Technically models are obvencouraged by recent closes below 296.70 (200 dma).. I’m sidelined, will look to buy dips here 292-294.
Morgan Stanley