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  • Mike Paterson

Markets await ECB

Thursday 8 September 2022

Variable risk sentiment again but no surprises for guessing what markets and traders are focussed on today as the ECB step up to deliver a 75bps rate hike, or not as the case may be. Much will depend on what they back it up with. Don't forget that the timings have changed as of last meeting so announcement at 12.15 GMT and presser at 12.45 GMT.


Gold has found some dip demand again below $1700 but oil still sliding as the fragile global economic backstory continues.Lots of the usual rhetoric out of Japan again but markets running a little scared this morning from news that there's a MOF/BOJ/FSA meeting underway, the first since June, as I type. Not expecting anything of note though apart from more talk at this stage.Bank of Canada duly delivered their 75bps rate hike yesterday while BoE Governor Bailey & Co delivered little of note in front of the UK Parliament Treasury Select Committee but remained justifiably cautious. Fed's Powell talking today at 13.10 GMT.


GBPUSD: Holding into 1.1400 in yesterday's retreat but failure into 1.1550 and now posting 1.1480. Patience a virtue still but I prefer the rally-sell side and ever-poised. Cross flows, notably GBPJPY and EURGBP still having an impact. EURGBP: Holding 0.8640 and now testing 0.8700 ahead of today's ECB decision. Sellers between 0.8650-80 now history. Lack of any really hawkish tones yesterday from BOE hasn't helped the Pound but much will depend now on how the ECB decision/rhetoric plays out.GBPJPY: Capped at 166.30 amid the USDJPY retreat from 145.00 and variable risk tones but support coming in at 165.00.


EURUSD: Another good hold of 0.9880 yesterday then a decent rally helped by the EURJPY demand as USDJPY challenged 145.00 before some reversal on both. A follow on above 1.0000 as some USD supply returned but back to 0.9980 this morning with rally sellers including me still poised. ECB/gas supplies still the elephants in the room. A few options in play again today/tomorrow too. USDJPY: USD demand/bond yields helping to underpin at 143.00 yesterday and another surge to 145.00 before a retreat on some profit-taking and rhetoric to 143.50 before bouncing.EURJPY: Support now at 143.00 but capping at 144.30 on the USDJPY retreat. USDCHF: Capping into 0.9870 again amid some softer USD tones and the natural CHF demand I've been highlighting with EURCHF capping at 0.9790 too. Support at 0.9740 holding so far. EURCHF: Testing 0.9740 as I type after capping at 0.9790 still helped by some general CHF demand. ECB in focus.


AUDUSD: A good hold of 0.6700 yesterday but equally struggling to hold above 0.6760-70 now. AUDJPY and AUDCHF playing out too both sides of the price. Beware EURAUD impact today. GBPAUD rallying from 1.7000 a few times but finding sellers into 1.7130. NZD still holding 0.6000 but sellers prevailing above 0.6075. GBPNZD holding around 1.8950 this time but finding sellers at 1.9050 in the bounce. USDCAD: Capped around 1.3200 again as the BOC duly delivered their 0.75% rate hike while remaining both hawkish on inflation and cautious on economy but more hikes expected. Holding 1.3100 in the retreat though amid some USD dip demand and oil sliding.


Let's continue to be careful out there.


Interbank rates: 08.40 BST

GBPUSD 1.1484

EURUSD 0.9980

EURGBP 0.8690

GBPEUR 1.1508

GBPJPY 165.00

GBPCAD 1.5088

GBPCHF 1.1196

GBPZAR 19.9675

GBPHKD 8.9507

USDJPY 143.74

EURJPY 143.40

EURCHF 0.9746

EURHKD 7.7832

AUDUSD 0.6732

NZDUSD 0.6042

USDCAD 1.3133

USDCHF 0.9766


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