Monday 11 March 2024
As I've been highlighting lately we're seeing increasing speculation again that the BOJ will tighten on March 19 in the wake of strong wage growth and with wage talks underway this week we've been hearing further chatter from BOJ on removing YCC and employers federation talking up wages which has seen USDJPY in retreat again and JPY demand prevailing overall.
Friday's US NFP data showed larger headline jobs creation figure but higher unemployment rate and softer wages data which saw the Greenback remain on the backfoot but given the USD supply already last week the impact was limited. UK labour report and latest US CPI data tomorrow the next focus. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow.
Equities have been in retreat again off Friday's rally-highs by and large as some profit-taking continues but remain underpinned overall on the firm belief that interest rates will be coming down at some stage soon apart from in Japan ofc. WTI capping at $78.50 this time but holding $76.80 in the retreat amid the second-guessing on Red Sea/Gaza and global economy. Gold has continued its impressive move higher to post fresh record highs of $2195 on Friday but sharp retreat into $2165 on some profit-taking but remains underpinned overall on the belief that FOMC will start cutting rates in June.
GBPUSD: Failure around 1.2880 on Friday post-NFP but holding 1.2830 since amid the general USD supply but GBPJPY selling one againhelping to cap. I remain poised for further re-sells when momentum fades as we continue to range overall. EURGBP: Testing 0.8500 on Friday amid the general EUR supply still with ECB rate-cut talk via the official "leaks" and now capping at 0.8530. GBPJPY: Testing 188.20 this morning in the retreat from 189.25 amid the JPY demand. Expecting some dip support still given the recent high levels and with BOJ next week in focus.
EURUSD: Support around 1.0930 amid the general USD supply but sellers capping at 1.0980 on Friday on the ECB rate-cut conjecture. I remain a rally seller as my preferred side. USDJPY: Capping at 147.30 and an extended retreat into decent 146.50-60 support this morning amid the USD supply/JPY demand double-whammy. I remain a rally seller as preferred side overall.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
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