US bonds in retreat again
Friday 1 April 2022
Another turnaround from Russia who are now demanding to be paid in Roubles for its oil has seen a general retreat in the Euro helped by the ECB being in no rush to hike rates and this morning we've also seen a sell-off in US treasuries with rising yields underpinning the Greenback and JPY supply returning as the new month gets underway.
Throw in the usual central bank speculation on rate hikes with the US NFP data in focus today all amid the ongoing Ukraine war and it remains a heady mix. Equities and gold are off their lows again while oil continues its retreat after Biden instructed the release of 1bln bpd in US reserves over the next 6 months.
GBPUSD: Found a cap at 1.3180 again in yesterday's 4pm London month-end fix rally which saw some general USD supply and some re-sells made per ongoing strategy and pips banked in the retreat. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always. EURGBP: A decent retreat and testing 0.8420 after Russia's insistence on being paid in Roubles for its oil which has knocked the Euro off its perch. I would expect some more dip demand down here. GBPJPY: Finding support at 160.40 in the latest retreat from 161.20 as JPY supply returns with USDJPY dip demand into 121.30 again yesterday at the 4pm fix.
EURUSD: A retreat through 1.1120 on the general softer EUR tones and firmer USD has seen a test of 1.1040.
USDJPY: Another exteded dip into 121.20-30 at the 4pm London month-end fix and a solid rally since TO 122.77 in Asia. EURJPY: Support now at 135.00 after a good hold of 134.50 but failing around 135.80 in the rally so far.
USDCHF: Support coming in at 0.9220-30 again after the hold of 0.9190 amid the general USD retreat yesterday with EURCHF falling too. SNB shadow lurking amid the fragile backdrop. EURCHF: A further retreat into 1.0200 amid the general EUR sell-off per my tweet yesterday with the SNB seemingly finally putting a line in down here. Sellers poised still though.
AUDUSD: Another good hold of 0.7465 yesterday and this morning so far and now testing 0.7520 as I type. NZDUSD capped into 0.6960 this time but holding 0.6910 and now testing 0.6930 in the latest rally.USDCAD: Holding 1.2460 in the latest retreat and rallied to look at 1.2530 again as oil retreated and some USD demand returns but in retreat again as I type. Two-way business still expected amid all the uncertainty. Some options interest in play too again today.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good weekend everyone.
Interbank rates: 08.46 BST