Some risk appetite returns but all very fragile still
Friday 13 March 2020
US Treasury yields and equity futures have both been rising in Asia giving a boost to risk sentiment and the Greenback but with core pairs also getting a lift. European equity markets are also making a few gains in early trading and we've seen USDJPY up to 106.22 having found a line in the sand at 104.60 and USDCHF up to 0.9478 with similar rallies in the associated crosses.
Yesterday the ECB announced a series of measures but, as per my preview, they were limited to say the least. We saw some volatility in the immediate aftermath with a EURUSD rally to 1.1300 and drop to 1.1200 even quicker and then lows of 1.1056 as Lagarde struggled, and some, to calm markets in her presser. 1.1225 has capped rallies since and the jury remains out.
Nothing in these markets is simple or predictable right now so how we end an explosive week is still very much yet to be decided. Expect more twists and turns for sure with Coronavirus fall-out not going away any time soon.
GBPUSD tumbled to 1.2491 with GBPJPY and GBPCHF supply helping to push it down along with another surge higher in EURGBP but has since posted 1.2625 with EURGBP in a real rollercoaster ride around the ECB and falling back again to 0.8863 (GBPEUR 1.1282) from 0.8941 (1.1185). GBPJPY plummeted further to 131.25 before bouncing to test 134.00 but market risk remains fragile overall so sellers remain poised.
I stay poised to sell GBP rallies and buy back in the dips as ever and I hope the bearish steer is helping to guide you.
USDJPY found some concerted demand in the dips below 104.00 yesterday and then 104.60 after a quick bounce around 105.50 and retreat with both the BOJ and GPIF being cited. No confirmation of either but definitely some extraordinary buy interest down there and the BOJ continue to add plenty of liquidity.EURJPY fell to 116.30 post-ECB but since back to 118.85 amid the general roller-coaster ride across the board.EURUSD has been on a roller coaster ride of its own between 1.1056 and 1.1220 and is still making its mind up at 1.1200 as I type with 1.85bln in option expiries there today. USDCHF found buyers as EURUSD tumbled and EURCHF also found a line in the sand at 1.0540 (SNB?) but sellers prevailing around 0.9480 and 1.0600.
AUDUSD tumbled to 0.6213 before rallying but sellers remain poised.USDCAD has been on its own rollercoaster ride with lows of 1.3710 and highs of 1.3962 amid the variable risk and oil prices.
Fickle Forex markets ever prevailing so be ready to jump on moves with your orders as always. Caution advised as ever if you're not sure but do feel free to contact me.
My beloved Southend are away in Yorkshire tomorrow as problems mount off the pitch with a winding-up order hearing adjourned to 29 April. Sad times and even more problems to come if we have to play behind closed doors with cash flow crucial to us right now. Lots of sporting events being cancelled/postponed/threatened though by the Coronavirus concerns with public welfare quite rightly being given high priority.
Have a good day/weekend one and all. Let's be careful out there as ever.
Interbank rates: 07.50 GMT