Fragile risk sentiment again as another week gets underway
Monday 8 March 2021 International Womens Day
We've seen bond yields rise/remain underpinned and another wobble in equity markets led by tech stocks with oil coming off its highs too and demand for the Greenback again as a fresh week opens up after Friday's strong jobs/wages report and Biden's latest stimulus package being approved by the Senate. The vote now goes to the House of Reps tomorrow (Tuesday).
BOE governor Bailey speaks at 10.00 GMT with a Q&A session too and the ECB release the latest data for their PEPP programme which markets will scrutinize for clues on anty yield rise curbing.
As always though the FX jury remains out still so we need to focus on price action and value for money in our entry and exit levels. Discipline and patience needed more than ever in these ever fickle/fragile times.
GBPUSD held 1.3780 on Friday but equally has capped at 1.3880 since as we continue to range but with lower lows in this latest retreat. Some support now from EURGBP which is breaking down through 0.8600 as I type amid some general EUR weakness again after duly finding rally sellers into 0.8650 then again at 0.8630. Support nearby at 0.8580-85 but equally sellers poised at 0.8620-30 now.GBPJPY continues to find a new base around 149.50 with USDJPY rallying through 108.30 but failing into 150.40 this time.
I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range but I still feel the recent rally somewhat over-cooked. Patience, entry/exit level and not getting greedy remain key.Le's see what Bailey has to say shortly.
USDJPY saw a spike above 108.60 after the NFPs but retreated to 108.10 on the softer risk/JPY demand plays but now testing 108.50 again as USD demand prevails. Markets still wondering whether when/where Japanese corps are/ will be buying any remaining JPY in this rally for the usual year-end repatriation.EURJPY found a cap into 129.60 again and now testing the previous base at 128.80 amid the softer risk and EUR tones. EURUSD has now broken down through 1.1920 and triggering stops through 1.1900 to post 1.1875 as I type amid the general EUR weakness and USD demand. USDCHF has found support at 0.9275-80 and now posting fresh recent highs of 0.9345 as EURUSD retreats.Rally tempered by EURCHF below 1.1100 but holding 1.1060 with the SNB ever-watchful/helpful.
AUDUSD capped at 0.7720 this time and now back down through previous lows of 0.7660 to post 0.7640 amid the firmer USD softer/risk tones. USDCAD spiked to look at 1.2740 after NFPs but was soon lower again testing 1.2650-60 as oil continued its firmer tones and now testing 1.2700 again amid the USD demand and with oil off its week-end highs.
The mighty Shrimpers of Southend earned a point on Saturday but equally dropped two as our lack of goal scoring prowess once again proved our undoing. England's cricketers duly batted poorly again but all credit to India and the spinners for a deserved series victory, proving to be consistent when it really counted.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week everyone.
Interbank rates: 08.36 GMT