Central Banks in focus
Tuesday 20 September 2022
Firstly thank-you for your understanding in my not updating yesterday and heading to London. A very moving experience as we found a perfect spot to view the procession and pay our last respects to Queen Elizabeth II.
A busy week ahead now as markets go into second-guessing over-drive, even more so now with this morning's opener from Sweden's Riksbank and their unexpected 100bps hike. US Fed FOMC now have a lot to think about for their decision tomorrow, followed by the BOJ, SNB, BOE, Norges Bank, and SARB on Thursday.
Meanwhile equity markets still treading water ahead but off their latest highs. Gold in retreat again too after failing at $1680 but Oil nudging higher as I type. Ukraine/Russia war still a very large elephant in the room if we look past central banks' after-the-event fight against inflation.
Conjecture remains in these ever-fickle markets so don't over-analyse but be ready with your preferred levels/strategy. Look for appropriate risk verus reward. Discipline is key as always but equally hesitation can often ruin a great idea.
GBPUSD: A retreat yesterday into 1.1360 but a solid rally to 1.1460 since before falling back to 1.1425 this morning where we also have options in play today. Patience a virtue still but I prefer the rally-sell side and ever-poised.
EURGBP: 0.8745-85 covers it for the moment with more two-way business expected for the moment as BOE casts a shadow.
GBPJPY: Capping at 164.40 after a decent better-risk rally from 163.40 after holding 163.00 again yesterday. I still think we can expect some two-way price action down here amid the fragile global backstory. BOJ and BOE casting a shadow not to mention tomorrow's FOMC impact on USD and risk sentiment.
EURUSD: Finding decent support around 0.9980 again and now 1.0000 but failing at 1.0040 in the bounce. I remain a rally seller as my preferred side. USDJPY: Finding support into 143.00 then 143.20 amid some general USD demand still as US bond yields provide support but failing at 143.75 as we continue to range amid the mixed risk tones and FOMC. Still not convinced the bullish trend has ended but still preferring the rally-sell side overall. Definitely expecting more 2-way business.
EURJPY: Support now between 143.40-50 but failing at 144.00 as we range tightly. Expect some two-way business still.
USDCHF: Holding 0.9615-20 still after the retreat ifrom 0.9680 but capping at 0.9660 so far as EURUSD and EURCHF both range. Some natural CHF demand still but SNB still keeping an eye on matters ahead of Thursday's decision. EURCHF: Holding 0.9630-60 now but struggling above 0.9680 this time capped by some general CHF demand but SNB seemingly smoothing downstairs still.
AUDUSD: Now capping at 0.6750 amid some firmer USD tones but holding around 0.6700 in the retreat as I type. Some option interest in play. I remain a rally seller as my preferred side. GBPAUD finding 1.6980-00 area a base still but with sellers capping at 1.7080-00 again. NZD falling through 0.5930-50 support and now posting fresh recent lows of 0.5917 amid the firmer USD. GBPNZD supported at 1.9200 amid the firmer GBP tones and soggy NZD sentiment and now rallying to 1.9320. USDCAD: Decent retreat from 1.3340 to 1.3230 amid some firmer oil tones and CADJPY demand but bouncing into 1.3280 as I type. Expecting some two-way business overall still amid the fickle variables.
Travesty of a result at the hallowed Hall but a well-earned point against high-flying Wrexham. Disallowed SUFC goal and subesequent Wrexham player protest/intimidation of referee and linesman warrants investigation.
Let's continue to be careful out there.
Interbank rates: 08.55 BST