Friday 5 January 2024
Today sees the release of the latest key US NFP jobs/wages data at 13.30 GMT and then US ISM amid a landscape of USD demand prevailing with US bond yields on the rise in the past 24 hours and better risk tones overall still.
Meanwhile the Ukraine/Russia war and the Red Sea disruptions/fallout continue to accelerate while the ongoing Middle East Israel/Hamas back-story casts its own shadow over markets and traders are still second-guessing the rate/extent of CB interest rate cuts in the months ahead too.
Equities rallied then fell in NY once more and a tad lower again this morning with the jury still out on the speed of cuts by FOMC et al. WTI is finding some support at $71.00 amid the Red Sea concerns after capping at $73.50 with sellers poised still. Gold ranging tightly $2030-50 for the moment as the jury remains out.
GBPUSD: Capping at 1.2730 yesterday and testing 1.2660 this morning again amid the USD demand. I remain poised for further rally sells when momentum fades but caution still required as we range tightly. EURGBP: Capping at 0.8640 again yesterday amid some EUR supply returning and helped again by better risk GBPJPY demand but holding 0.8605 this morning as the CB jury remains out. GBPJPY: Better risk tones overall and dip demand on core pairs forming a base at 183.00 before capping above 184.00. We can expect rally sellers to remain poised amid all the uncertainty but underpinned again for the moment in these ever fickle markets.
EURUSD: Support coming in at 1.0900 after capping at 1.0970 yesterday amid the USD demand with the jury out still amid all the CB conjecture and cross flows. I remain a rally seller overall. USDJPY: Finding support at 144.00 yesterday and finding some decent demand amid the better risk JPY supply. Conjecture remains on BOJ normalization but seemingly hopes fading again for the moment.
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Interbank rates: 08.45 GMT