CIBC: FX Flows: FXWW

From the FXWW Chatroom: Nikkei opened in red but the demand for Goto-bi Day helped the UsdJpy. One of the Japanese megabanks paid the top 111.45 right at the Tokyo fix, nicely done ke-ching! While the trend is to sell UsdJpy, our trader Jon said market is positioned long Jpy against Usd and crosses. UsdJpy has backed away from high but remains cautious. Our rates trader Pawan Kalia said JGBs have slipped sharply after the BoJ reduced buying of super-long JGB. They have been dropping hints this past week at change of YCC.
UsdJpy backed off after the fix – there was some selling of AudJpy by fast money accounts as they watched the Shanghai stock market turn red. Sell orders in UsdJpy is reported 111.55-70 and weak stop buy orders above 111.85. Option related bids surround 111.00 and better buying reported 110.60-70. Keep an eye out on EurJpy, weak stop buy orders above 132.00.

Story in The Times commenting on UK budget 2017. Health chiefs at NHS England are arguing Chancellor Philip Hammond’s cash injection for the NHS is far less generous than it looks and will be cancelled out by the growing and ageing population. On housing, IFS said it is impossible to say with confidence how many houses it will deliver. The Telegraph said PM Theresa May will tell European Council President Donald Tusk today she is prepared to give ground on the Brexit divorce bill. However the newspaper did not mentioned a number.
Cable has drifted lower from 1.33-handle. Offers are reported mid-1.33’s.
Mainstream media said Germany’s SPD is open to talks with Angela Merkel. Bloomberg story said the SPD needs to discuss this internally. This news is certainly positive for EurUsd. Past 24-hours, there has been good buying of short dated (Nov 30) strikes 1.1838, 1.1840 and 1.1845 totalling Eur1.2bn. Daily resistance comes in at 1.1855 and nothing much downside.
Asians
Report in The Nikkei that South Korea and US will be holding joint-exercise Dec 4-8. According to Yonhap News, this will be the biggest number of F-22 fighters participation. Watch for reports from KCNA.
UsdKrw opened at 1085 and traded sideways without comments from South Korean authorities.
All eyes on China stock market after yesterday’s rout (sell-off came as market cited rising bond yields amid tighter regulations targeting corporate debt). Shanghai opened with small positive but soon pared gains.
Onshore real money accounts were better sellers of 1s UsdTwd NDF this morning.
Short covering in the onshore USDCNY, opened near 6.5770 and moved up to 6.5863. This pulled the USDCNH higher as well, from 6.5748 to 6.5835.
View the latest market information in the FXWW Chatroom with a free trial

Leave a Reply