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  • Writer's pictureMike Paterson

NFP data the new focus today

Friday 2 February 2024

The Bank of England yesterday duly delivered mixed/cautious messages as I suggested yesterday following on from the FOMC on Wednesday. Yes, Bailey seemed to rule out any further hikes but equally the quarterly MPC Report expressed concern that inflation may yet still rise again so rates on hold definitely as the second-guessing continues. US bond markets in focus again with yields lower but equities higher again leading to some risk-off appetite and JPY supply returning.

The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still casting their own shadow but immediate focus now turns to today's key US Non Farm Payrolls data.

Equities remain underpinned and rallying again adding to the better risk appetite but I still see wobbly times ahead. WTI has dropped back from $77.00 this time with sellers poised still but holding $73.50 so far with Red Sea concerns, and technicals offering some support still. Gold holding $2035-40 still but capping at $2065 on the better risk tones as we continue to range tightly.

GBPUSD: Testing 1.2620 yesterday but capping into 1.2770 so far in the USD supply-led rally underpinned by GBPJPY demand. I remain poised for further sells when momentum fades while we continue to range. EURGBP: Holding 0.8520 yet again after capping at 0.8560 yesterday and still looking soft overall with bets on BOE holding interest rates for longer than ECB.GBPJPY: Capping at 187.30 this morning after holding 185.30-50 on firmer risk tones. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets.

EURUSD: Support at 1.0800 then 1.0850-60 in the USD supply-led rally but stalling into 1.0900 so far this morning.I remain a rally seller. USDJPY: Capping around 147.00 yesterday but holding 145.80 this time and boucing again to 146.80 amid better risk tones/JPY supply. I remain a rally seller as preferred side overall.

For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email

Interbank rates: 08.50 GMT

GBPUSD 1.2755

EURUSD 1.0888

EURGBP 0.8536

GBPEUR 1.1713

USDJPY 146.79

GBPJPY 187.22

GBPCAD 1.7046

GBPCHF 1.0923

GBPZAR 23.7654

GBPHKD 9.9322

USDCHF 0.8562

EURCHF 0.9325

EURHKD 8.4746

AUDUSD 0.6595

NZDUSD 0.6145

USDCAD 1.3375

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