UsdJpy opened at 109.05 and rose to 109.17, hearsay offers scattered from 109.20 to 109.50, belonging to exporters while bids sitting under 108.95, leftovers from last Friday. 100-Day SMA at 108.85. There is a $1.5bn worth of option strike at 109.00 due today new York cut. Tokyo market will reopen tomorrow but being Golden Week, don’t expect much activity.
Amber Rudd stepped down as UK Home Secretary, following the Windrush scandal. Taken off BBC, the Windrush row began when it emerged that some migrants from Commonwealth countries, who settled in the UK from the late 1940s to the 1970s, and their relatives, had been declared illegal immigrants. GbpUsd is still hurt from last week’s GDP miss. On Sunday, CBI survey indicated that Q1 GDP figures are start of a prolonged economic slowdown. GbpUsd traded in an almost 10-point range, danger lurking near 1.3700.
They say no news is good news, not for NAFTA. Canada, the United States and Mexico failed to reach an agreement, they will continue on May 7. However, Trump tariffs on steel and aluminium will kick in as early as Tuesday, could be painful for Canada. Report in National Post said NAFTA talks loom particularly large over two major potential transactions in Canada. Royal Dutch Shell Plc to build a $40-billion LNG facility on Canada’s West Coast is unlikely to move ahead and the NAFTA could also cost delay in the $1.5bn takeover of Aecon Group by China’s SOE.
Intraday day guys got stopped out in USDCNH when it broke above 6.3250, some added long last week but bailed out this morning. The offshore pair started the session at 6.3200 got sold at the open and triggered series of stop sell orders along the way to 6.3070.
Market eyes UsdInr opening. Late Friday, RBI said it is withdrawing a restriction that limited foreign investors to only investing in government and corporate bonds with tenures of three years or more. Spot closed at 66.66 last Friday, 1s NDF closed 66.77 traded down to 66.53/54
It has been a quiet session in Asia with little news and extremely muted price action. Chinese PMIs came out higher than expected (both manufacturing and non-manufacturing), to little fanfare – today is a holiday in China.
Coming up in Europe, we have the latest German CPI prints, Norwegian retail sales. In the UK, the news that Amber Rudd has resigned as Home Secretary, following the Windrush scandal, is occupying many of the headlines. At 10:00 BST the BoE is published remarks from Andy Haldane, with the May meeting pretty much as off the table as it could be right now. The FT reports that May, Macron and Merkel are battling to save the Iraq deal.
In the US, we get personal consumption data. This is a big week – today is month-end, then we get the FOMC mid-week and NFP on Friday. Both the USD and the US 10y stalled just shy of some significant levels last week, suggesting that the USD rally may be done for now – although month-end flows could change that.