Wednesday 31 May 2023
Soggy Chinese PMI data has added to the general feeling of uncertainty that I've been banging on about ages and we've seen risk sentiment turn lower again with some JPY demand notable amid the firmer USD tones generally.
Aussie CPI came in stronger than expected which will give the RBA something to think about while French CPI was softer and adding to the generally weaker EUR sentiment amid any further rate hikes now fully factored in. German regional CPI data coming in softer so far too.
Equities are lower again this morning as I type amid the fragile risk sentiment while WTI has capped at $72.00 amid the ongoing global economic growth concerns but holding $69.00 this time so far in the extended retreat. Gold capping at $1965 as the natural sellers and Fed tigtening expectations continue to weigh despite fragile risk tones helping to hold support at $1930. Increasing tensions in the Ukraine/Russia war, with fresh drone attacks now on Kyiv and Moscow, continue to be the elephant in the room along with US/China tensions as the world remains a fragile place. Serbian unrest adding now too.
GBPUSD: Failure at 1.2450 yesterday and then 1.2425 after a hold of 1.2380 but finding support at 1.2350 this time. Now nudging 1.2360 as some USD demand returns. I remain a rally seller. EURGBP: Capping at 0.8650-60 this time as the general EUR supply continues and helping to support GBPUSD. Expect some two-way business overall bu looking soggy for the moment. GBPJPY: Capping at 174.20 as USDJPY capped and wobbly risk tones returned but holding 172.50 so far. Rally sellers ever-poised but some demand expected too for the moment amid the uncertainty.
EURUSD: Capping into 1.0745 yet again yesterday on the USD supply-led rally and some re-sells duly placed.Now down through 1.0675 and some pips banked along the way but I remain a rally seller as my preferred side. USDJPY: Still looking underpinned overall amid the general USD demand but showing some greater signs of fragility as the YCC conjecture continues and yesterday's rumour mill on some BOJ/MOF smoothing. Some jobbing pips gratefully banked again as we hold 130.30-50 support but I still prefer to sell rallies/be long JPY overall.
More detailed analysis across a variety of pairs and mentoring available from mike@mspfx.co.uk
Interbank rates: 08.40 BST
GBPUSD 1.2365
EURUSD 1.0674
EURGBP 0.8634
GBPEUR 1.1581
USDJPY 139.73
GBPJPY 172.73
GBPCAD 1.6873
GBPCHF 1.1260
GBPZAR 24.4654
GBPHKD 9.6284
USDCHF 0.9115
EURCHF 0.9728
EURHKD 8.3147
AUDUSD 0.6477
NZDUSD 0.5994
USDCAD 1.3647
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