Monday 5 February 2024
Friday's key US Non-Farm Payroll report came in way stronger than expected with both jobs and wages showing marked increases. Cue USD demand with US bond markets in focus still with yields and equities higher again leading to some better risk appetite and JPY supply again albeit some reversal and two-way business currently. US Fed Chair Powell appeared on TV yesterday in a pre-recorded interview but said little different to his comments last Wednesday.
The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still casting their own shadow. Final PMI data readings out today after last week's flash numbers.
Equities remain underpinned and rallying again in NY post-data before falling back a little but currently steady as European trading gets underway. WTI has retreated again and dropped back from $74.50 this time with sellers poised still but holding $72.00 so far with Red Sea concerns, and technicals offering some support again. Gold fell too on the higher bond yields/better risk tones but holding $2020 after capping at $2055-60 as we continue to range tightly.
GBPUSD: Holding 1.2600 after capping into 1.2780 in the USD demand-led retreat post-NFPs. I remain poised for further sells when momentum fades while we continue to range. EURGBP: Holding 0.8520-25 yet again but capping at 0.8555 as the BOE/ECB debates continue. GBPJPY: Capping at 187.50-70 but holding 186.80-00 on the generally firmer risk tones. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets.
EURUSD: Support at 1.0760 this time in the extended USD demand-led retreat from 1.0880. I remain a rally seller. USDJPY: Capping around 148.80 after holding 146.50 then 148.00 after the sharp NFP-led spike and better risk tones/JPY supply. Tight stops into NFP helped restrict losses and some re-sells placed into 148.50. I remain a rally seller as preferred side overall but dip demand notable for the moment.
For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
Interbank rates: 08.36 GMT
GBPUSD 1.2615
EURUSD 1.0767
EURGBP 0.8535
GBPEUR 1.1716
USDJPY 148.53
GBPJPY 187.37
GBPCAD 1.6996
GBPCHF 1.0963
GBPZAR 23.9376
GBPHKD 9.8154
USDCHF 0.8686
EURCHF 0.9353
EURHKD 8.3749
AUDUSD 0.6504
NZDUSD 0.6067
USDCAD 1.3477
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