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EUR / USD
GBP / USD
USD / JPY
USD / CAD
AUD / USD
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USD / CHF
AUD / JPY
AUD / NZD
EUR / CHF
EUR / GBP
EUR / JPY
GBP / JPY
By Burton Frierson  —  Jun 14 - 04:48 PM
  • EUR net spec long drops to 43,644 contracts in week to Tuesday from 67,870 the previous week

  • JPY net spec short increases to 138,579 from short of 132,101 contracts

  • GBP long increases to 52,121 contracts from long of 43,210 previously

  • AUD net spec short increases to 64,785 from short of 51,303 contracts

  • CAD short jumps to 129,493 contracts from 91,639

 

Source:
Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Jun 14 - 01:40 PM
  • NY opened near 156.95 after 158.255 hit on EBS in overnight trade

  • Pair erased some of the overnight drop as US$ buying ebbed

  • Downbeat June U of Michigan helped to stem US$ buys, improve risk

  • EUR/JPY bounced off its 167.54 low & USD/CNH slid from its high

  • Equities erased most of their early fall & yields US2YT=RR firmed

  • USD/JPY neared 157.50 then neared 157.255 late, was up +0.14% late

  • Techs are mixed; daily RSI rising but inverted daily hammer formed

  • Falling monthly RSI, monthly long legged doji reinforce mixed techs

  • Investors to focus on US May retail sales, IP reports on Tuesday

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Justin Mcqueen  —  Jun 14 - 01:35 PM

Cable fell on Friday with traders cutting exposure to European FX as uncertainty around the French elections increased, which in turn saw the pair drop to a 4-week low.

However, with UK CPI, the Bank of England rate decision and flash PMIs on the docket next week, traders are likely to be reticent in chasing GBP/USD breakouts, emphasized by the fleeting above moves above 1.28 and below 1.2675-90.

That said, as has been covered at length, the current positioning set-up, according to CFTC data would imply that risks are skewed to downside.

In any case, the upcoming UK CPI figures will be key in setting expectations for the BoE rate outlook, with particular attention placed on the services inflation print.
Currently, markets have attached a 44% chance of an August cut and thus risks are finely balanced heading into the report.

EUR/GBP held onto 0.84, though rallies are likely to be faded in the lead up to the first round of the French election.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jun 14 - 01:30 PM

Synopsis:

Goldman Sachs forecasts that the Federal Reserve will maintain the current federal funds rate range of 5.25-5.5% until September. The firm anticipates the first rate cut of 25 basis points to occur in September, followed by a steady quarterly pace of cuts until the terminal rate range reaches 3.25-3.5%.

Key Points:

  1. Current Rate Hold:

    • Fed Funds Rate: The Federal Reserve is expected to keep the current fed funds rate range at 5.25-5.5%.
    • Timing for Cuts: The first rate cut is projected for September.
  2. Rate Cut Schedule:

    • Quarterly Reductions: Following the initial cut in September, Goldman Sachs expects additional rate cuts to occur at a quarterly pace.
    • December Cut: Another 25bp cut is anticipated in December.
  3. Terminal Rate Range:

    • Final Target: The series of cuts is expected to continue until the federal funds rate reaches the terminal range of 3.25-3.5%.

Conclusion:

Goldman Sachs predicts that the Federal Reserve will maintain its current rate stance until September before initiating a series of quarterly rate cuts. These adjustments are expected to bring the federal funds rate down to a terminal range of 3.25-3.5% by the end of the cycle.

Source:
Goldman Sachs Research/Market Commentary
By Justin Mcqueen  —  Jun 14 - 12:20 PM

An overall choppy session for USD/JPY to close out the week where the Bank of Japan’s decision to leave policy unchanged disappointed the outside chance that they may have cut bond purchases at this meeting.

Though the pair rallied above 158, the move was short-lived with French election jitters driving the action, prompting a flight to safety as demand for FX havens picked up.
That said, given the risk has been Eurocentric, the dollar has also benefited and thus USD/JPY trades flat.

Instead, yen upside on haven flows will be better expressed against the euro leading into the first round of the French election.
In turn, the traders should closely watch the Bund-OAT 10-year spread – widest since 2017 – as a guide to EUR/JPY direction in the short-run.

On the technical front, those looking for EUR/JPY downside, the 55-day MA (167.19), which has largely defined the uptrend this year, is important support.
A break below may well exacerbate downside momentum.

For USD/JPY, dip buying remains a prominent feature of the pair, with U.S. stocks at the all-time highs and with the Fed dots now showing one 2024 cut, there are seemingly few reasons not to hold the greenback -- unless there is a notable deterioration in the data.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jun 14 - 10:45 AM

Synopsis: 

Bank of America’s recent FX and Rates Sentiment Survey reveals key trends in market sentiment, highlighting perceptions on crowded trades, USD risks, and the impact of US inflation and the upcoming US election on currency movements.

Key Points:

  1. Crowded Trades:

    • Long risk continues to be perceived as the most crowded trade.
    • The fear of crowded USD long positions has dissipated.
  2. USD Upside Risks:

    • Sticky US inflation and associated Fed repricing are viewed as the biggest upside risks for the USD.
    • Persistent US decoupling risk has reemerged, adding to the potential upside for the USD.
  3. US Election Impact:

    • With the US election approaching within a 3- to 6-month window, a fifth of respondents view election-related positioning as a downside risk for the USD.
  4. Fed Rate Cuts:

    • The survey suggests that a scenario where the Fed does not cut rates in 2024 is unlikely to trigger fresh highs for the USD.

Conclusion:

BofA's survey highlights that while long risk remains the most crowded trade, concerns over USD longs have lessened. Sticky US inflation and potential Fed repricing are seen as major upside risks for the USD, while the upcoming US election is viewed as a potential downside risk. Despite these factors, the lack of Fed cuts in 2024 is not expected to drive the USD to new highs.

Source:
BofA Global Research
By Christopher Romano  —  Jun 14 - 09:35 AM
  • Ether traded up 1.1% in early NY, traded 3456.89-3530.58, a tight range

  • EquityESv1, yieldUS10YT=RR drop on safe-haven bid had no impact on Ether

  • EUR/JPY drop & gold rally reinforcing risk-off also didn't sink Ether

  • Ether investors likely need to digest the crypto's recent price drop

  • Consolidation completion may result in the down trend resuming, new lows

  • Breaks below the 50-DMA, April 28 daily may then take place

  • Supports near 3045/50 and 2860/65 may then be targeted by Ether bears

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jun 14 - 09:30 AM

Synopsis:

Credit Agricole highlights the historical impact of political events, particularly the upcoming French elections, on the EUR. With French President Emmanuel Macron calling a snap election, the EUR may face selling pressure, influenced by widening yield spreads and growing political risks.

Key Points:

  1. Upcoming French Elections:

    • French President Emmanuel Macron has called a snap election for June 30 and July 7.
    • The EUR is expected to remain under selling pressure due to the political uncertainty and widening 10Y OAT-Bund yield spread, which has reached its highest level since 2017.
  2. Market Focus on Polls:

    • Market participants will closely monitor polls ahead of the election, anticipating potential shifts in political power.
    • Growing support for the National Rally (RN) or a majority RN-led coalition government could exacerbate EUR headwinds.
  3. Historical Impact of Political Events:

    • Credit Agricole analyzes the EUR's behavior during recent elections in France and Italy, where populist parties made significant gains.
    • The focus is on the French and Italian general elections in June and May 2022, respectively, as well as the formation of the populist Conti government in Italy in May 2018.
  4. EUR Performance:

    • The EUR experienced considerable losses in the run-up to and aftermath of these political events.
    • Historical data suggests that similar trends could be expected ahead of the upcoming French elections.

Conclusion:

Credit Agricole anticipates that the EUR will face continued selling pressure due to political risks associated with the upcoming French elections. Historical trends indicate that the EUR tends to suffer losses in the face of significant political uncertainty and populist gains, suggesting a cautious outlook for the currency in the near term.

Source:
Crédit Agricole Research/Market Commentary
By eFXdata  —  Jun 14 - 08:30 AM

Synopsis:

ANZ highlights the potential vulnerability of the British pound (GBP) going into the Bank of England (BoE) meeting on June 20. The analysis points to disinflationary pressures and market positioning as key factors influencing the GBP outlook.

Key Points:

  1. Upcoming BoE Meeting:

    • The BoE is scheduled to meet on Thursday, June 20.
    • Previous meetings have shown that the BoE's Monetary Policy Committee (MPC) is open to moving towards easing, even with sticky components in services CPI.
  2. Disinflationary Pressures:

    • PMIs suggest that disinflationary pressures are emerging in the UK economy.
    • This trend supports the possibility of the BoE considering rate cuts in the near term.
  3. Market Positioning:

    • Non-commercial positioning in GBP/USD is approaching maximum size again.
    • An August rate cut is currently underpriced by the market.
  4. Downside Risks:

    • Given the disinflationary pressures and current market positioning, risks are skewed to the downside for the GBP.
    • The GBP may be particularly vulnerable if the BoE signals a dovish outlook or moves towards easing.

Conclusion:

ANZ sees the risks for the GBP as skewed to the downside going into the BoE meeting on June 20. With disinflationary pressures building and market positioning suggesting an overbought GBP/USD, the currency may be vulnerable, especially if the BoE signals or moves towards easing. The potential for an underpriced August rate cut adds to the downside risk for the GBP.

Source:
ANZ Research/Market Commentary
By Christopher Romano  —  Jun 14 - 07:10 AM
  • AUD/USD traded 0.66415-0.6603 overnight, NY opened near 0.6615, down -0.30%

  • Drop aided by bid for safer assets; AUD/JPY fell to a 3-session low

  • US yieldUS10YT=RR, equityESv1 drops & USD/CNH rally reinforce safety bid

  • AUD/USD's brief overnight lift was limited with help from 10- & 21-DMAs

  • Falling daily, monthly RSIs, June monthly doji help techs lean bearish

  • May export/import prices, June U. of Michigan are data risks in NY

  • U Mich 1-yr, 5-yr inflation consumer inflation outlooks will be in focus

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Jun 14 - 05:40 AM
  • Strong bearish developments this week has left large options stranded

  • EUR 13 billion of deals between 1.0795 and 1.0950 for Friday's cut

  • Still over EUR 4 billion of exprires closer to market: 1.0660-1.0755

  • More large expiries close to market:USD/CAD 1.3725 to 1.3815 USD 6.2 bln

  • EUR/GBP 0.8440 EUR 1.13 bln: USD/CHF 0.9000 USD1.8 bln

  • AUD/USD 0.6590-0.6620 AUD 2.4 bln

  • All expiries for today's New York cut

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Jun 14 - 04:40 AM
  • Long upper candle shadow Wed into steep losses Thurs-Frid

  • A new significant high in place at 1.2859

  • Sterling slipping back into the middle of its previous 1.2676-1.2825 range

  • June 10 1.2689 low initial

  • Fourteen day momentum has flipped to negative and RSI is falling

  • First negative momentum print since May 1

  • Long upper shadow on the weekly and a 200-WMA rejection noted

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Jun 14 - 03:50 AM
  • Cable falls to 1.2723 as USD/JPY outperforms GBP/JPY on dovish BoJ

  • 1.2723 is lowest level since Tuesday. GBP/JPY up to 201.60, high since 2008

  • Bids may emerge near 1.2700 if GBP/USD extends south (1.2707 = Tuesday low)

  • 1.2806 was Thursday's high, after dollar fell on soft US PPI, claims data

  • BoE seen on hold next week. Economists expect BoE rate cut on August 1

  • UK election July 4; Labour set for huge parliamentary majority nL8N3I90LD

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Jun 14 - 03:35 AM
  • Volatile EUR/USD latest big slump on course to close under the 1.0722 Fibo

  • 1.0722 Fibo is a 61.8% retrace of the 1.0602-1.0916 (April-June) EBS rise

  • If there is a daily close under the 1.0722 Fibo, that would be negative

  • That would increase the risk of a bigger drop to the April 1.0602 low

  • Fourteen-day momentum remains negative, reinforcing the bearish bias

  • EUR/USD Trader TGM2334. Previous update nL1N3IA06M

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Jun 14 - 03:20 AM
  • EUR/CHF falls to 0.9578 EBS low as French political crisis weighs on euro

  • 0.9578 is lowest level since April 19 (0.9565 was EBS low that day)

  • 10-year French vs German bond spread balloons to 77 bps, highest since 2017

  • Far-right RN plots path to power; leftwing parties form "Popular Front"

  • Swiss franc is safe-haven (0.9930 was EUR/CHF 13-month EBS high on May 27)

  • Franc gains since May 27 raise probability of another SNB rate cut next week

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Jun 13 - 11:50 PM
  • Steady in a 1.0636-1.0645 range supported by EUR/GBP +0.05% bargain hunting

  • Asian stocks/risk are softer with Treasury yields firmer 10yr +2bp 4.263%

  • Political uncertainty in Europe, led by France, continues to cap the Euro

  • Charts - momentum studies slide, as 5, 10, & 21-day moving averages fall

  • 21-day Bollinger bands expand - daily signals maintain a negative setup

  • Thursday's 1.0816 high then this week's 1.0852 top are the first resistance

  • 1.0719/21 0618% of the April/June rise and this week's 1.0719 base supports

  • A close below 1.0700 would be a strong bearish signal for next week

  • 1.0700 987mln and 1.0750 854mln are the close strikes for June 14

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Jun 13 - 11:40 PM
  • Steady in a 1.2750/1.2760 range with moderate flow on D3, capped by EUR/GBP

  • EUR/GBP climbed 0.07% in a 0.8415-0.8421 range on D3 with heavy volume

  • Reform UK overtakes PM Sunak's Conservatives in YouGov opinion poll

  • The Conservative campaign has so far failed to close the gap to Labour

  • There is no tier-one UK data, US consumer sentiment leads event risk

  • Charts; daily momentum studies flat line - 21-day Bollinger bands contract

  • Net positive 5, 10 & 21-day moving averages provide a modest topside bias

  • Wednesday's 1.2732-1.2859 range is initial support and resistance

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jun 13 - 04:30 PM

Synopsis:

Danske Bank provides insights into the EUR/CHF outlook ahead of the Swiss National Bank (SNB) meeting on June 20. The analysis highlights key factors influencing the cross, including recent market movements, political uncertainties, and potential SNB actions.

Key Points:

  1. Recent EUR/CHF Movements:

    • EUR/CHF has fully retraced the move higher following the SNB's cut in March, now trading close to the 0.96 mark.
    • The retracement is attributed to political uncertainty in France and a stronger CHF.
  2. SNB Meeting Expectations:

    • Danske Bank previously argued that the SNB would remain on hold at its upcoming meeting due to stronger growth in Switzerland, persistent global inflation pressures, and recent hawkish remarks from SNB's Jordan.
    • The recent decline in EUR/CHF and the SNB's focus on the currency present the biggest risk to this call.
  3. Potential SNB Actions:

    • If the SNB opts to keep rates unchanged, this would provide immediate support to the CHF, though Danske Bank expects this support to be short-lived.
    • Markets are likely to fully price in a September cut and consider a December cut as well.
    • If the SNB decides to cut rates, this would weaken the CHF.
    • Possible FX intervention by the SNB would also favor a weaker CHF.

Conclusion:

Danske Bank favors a weaker CHF over the next couple of months, despite the current market movements and political uncertainties. The SNB's decision at the upcoming meeting will play a crucial role in determining the near-term direction of EUR/CHF. An unchanged decision may provide temporary support to the CHF, but markets are expected to anticipate future cuts, leading to a weaker CHF. A rate cut or FX intervention by the SNB would further weaken the CHF.

Source:
Danske Research/Market Commentary
By Andrew M Spencer  —  Jun 13 - 08:25 PM
  • 0.05% after closing down 0.25%, resilient v's a 0.5% USD rise, EUR/GBP -0.4%

  • Reform UK overtakes PM Sunak's Conservatives in YouGov opinion poll

  • Six months ago the Conservative's poll result would have been unbelievable

  • There is no tier-one UK data, so risk appetite and the USD lead sterling

  • Charts; daily momentum studies flat line - 21-day Bollinger bands contract

  • Net positive 5, 10 & 21-day moving averages provide a modest topside bias

  • This week's 1.2859 high then 1.2893 March and 2024 high first resistance

  • Wednesday's 1.2732 low and then the 1.2680 May 30 base are first supports

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Jun 13 - 08:05 PM
  • +0.05% early after closing down 0.65% amid political uncertainty - USD +0.5%

  • Modest yield spread change, 10yr bund -4bp 2.491%, 10yr UST -5bp 4.240%

  • Trade conflict with China could have a significant economic impact

  • Charts - momentum studies slide, as 5, 10, & 21-day moving averages fall

  • 21-day Bollinger bands expand - daily signals maintain a negative setup

  • Thursday's 1.0816 high then Wednesday's 1.0852 top are the first resistance

  • 1.0719/21 0618% of the April/June rise and this week's 1.0719 base supports

  • A close below 1.0700 would be a strong bearish signal for next week

  • 1.0700 987mln and 1.0750 854mlnare the close strikes for June 14

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Jun 13 - 07:10 PM
  • AUD/USD steady after 0.4% fall Thu; slips back to middle of its recent range

  • Undermined by Fed's hawkish tone Wed; soft U.S. PPI , lower yields ignored

  • Soft U.S. CPI , PPI indicate June 28 PCE will show softening price pressures

  • Weak yuan, lower copper andd gold prices weigh on AUD sentiment

  • Downside limited; robust AU jobs data reinforces higher-for-longer RBA

  • Broad 0.6580-0.6710 range likely as Fed also pushes out start of rate cuts

  • Break of either side extends to 0.6550 & 0.6750 respectively; play the range

  • Interim supports 0.6625, 0.6600-05, resistance 0.6675-80

  • Thu range 0.6675-0.66265

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jun 13 - 03:00 PM

Synopsis:

JP Morgan outlines its expectations for the upcoming Bank of Japan (BoJ) meeting on Friday. The analysis focuses on anticipated policy changes, particularly regarding the BoJ's balance sheet and future JGB purchase schedules.

Key Points:

  1. Policy Announcement:

    • JP Morgan expects the BoJ to announce a policy of reducing its balance sheet.
    • The focus will be on how the BoJ schedules future JGB purchases, potentially moving towards a more structured Quantitative Tightening (QT) process.
  2. Market Price Setting Function:

    • The BoJ may aim to gradually restore the market's price-setting function in the JGB market, even if the QT process is not on full autopilot.
  3. Policy Rate Expectations:

    • While a policy rate hike is not expected at this meeting, JP Morgan anticipates the BoJ will raise the policy rate to 0.25% in July.
    • The BoJ is unlikely to send a clear message on the timing of this rate hike during this week's meeting.

Conclusion:

JP Morgan forecasts the BoJ to announce a balance sheet reduction policy during this week's meeting, with a structured approach to future JGB purchases to restore market price-setting functions. A policy rate hike is anticipated in July, though no explicit timing is expected to be communicated this week.

Source:
JP Morgan Research/Market Commentary
By Christopher Romano  —  Jun 13 - 01:20 PM
  • NY opened near 0.6640 after a quiet overnight session, rally ensued

  • US yields US10YT=RR, US$ sank after May PPI, weekly claims reports

  • AUD/USD turned positive, 0.6675 traded but gains were not sustained

  • AUD/JPY fell sharply, USD/CNH hit 7.2700 while stocks & gold sank

  • AUD/USD turned lower, fell below the 10- & 21-DMAs & hit 0.66265

  • Pair bounced slightly but still traded down -0.42% late in the day

  • Falling RSIs and June's monthly doji give techs a bearish lean

  • US May export/import prices, June U of Michigan risks loom for Friday

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Justin Mcqueen  —  Jun 13 - 01:20 PM
  • GBP -0.4%, CPI-led rally retraced, pair back below 200-hour MAs (1.2758-65)

  • Traders unlikely chase GBP breakouts with pivotal UK CPI due June 19

  • Thus, the cluster of lows between 1.2675-88 should hold in lead up to CPI

  • Similarly, moves above 1.28 is likely to be fleeting

  • Probability of an August BoE cut stands at 45% 0#BOEWATCH

  • For now, sterling upside is better expressed vs euro nL1N3IB0BS

  • COMMENT-GBP extends post-Fed slide, positioning is a concern nL1N3IB0P9

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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