CIBC FX Flows – FXWW Chatroom

Australia Q4 economic growth wasn’t too bad at 0.5% versus previous quarter of +0.3%. The number did miss estimates of 0.6% but tiny difference. Annual number was in line with estimates at +2.5%. Aussie took small dip to 0.7795, then traders said “wait a minute, it’s not a bad number” and Aud returned to print 0.7832. Both China HSBC PMI came in higher than previous month but Aud literally unchanged. In fact, the pair drifted below 0.7820. Please note there is a Aud1.2bn option strike at 0.7850, rolling off tomorrow, NY cut. Stop loss orders in AudUsd are building up above 0.7855.An interesting remark from one of the Japanese trust bank I talked to – he said he is bearish UsdJpy after PM Abe’s advisor Honda comment on Jpy yesterday. He said 120.00 will offer resistance. Well, I was then told that one of the large government agency scattered sell orders with several banks at and above 120.00.

Seems pretty intentional that these officials do not want this Usd sitting above 120-handle for various reasons. One of which is the local elections in April and other is the TPP. UsdJpy traded down to 119.495 where reports of macro bids were reported. Keep an eye on the stops surrounding 119.40 and 119.20. On the options space, there are several strikes at 120.00 maturing today and next few days as well. 

BOJ Governor Kuroda testified at the Lower House Financial Affairs Committee – reiterated that inflation likely to reach 2% in or around FY 2015. No impact on UsdJpy.Very little I can pen on Euro – there were some selling of EurJpy out of Japan in the morning but little impact felt. I am told that the EurUsd offers have been lowered to 1.1210 and buy orders crowd 1.1140-50 and more at 1.1100. Of course, stops are at 1.1090.

Hearsay bids in Gbp from 1.5330’s to 1.5310.

UsdCad tested downside when Aud jumped but US names were better buyers and took UsdCad from low 1.2490’s to 1.2504.

From our rates trader Pawan – The bond markets continue to slip, Treasury Futures has just made a fresh low, and curves continue to steepen. The huge outflows from bond bunds are clearly indicative of less demand for yield at these levels, and would also explain why corporate treasurers so keen to issue here while they have the chance. Supply is heavy, and other than central banks, there are not many others in terms of buyers. US10y yield delicately poised on the 100dma at 2.13%. 

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