FX Flows - Forexsites

From the FXWW Chatroom: Stop loss triggered during the early hours of Monday and had the UsdJpy printing 111.90. UsdJpy drifted lower, although there was demand for Goto-bi Day, Tokyo banks were better sellers. Our trader Jon said he exporters will be going to work into BOJ decision day and especially when the Golden Week starts on Friday, April 29.

Intraday support is said to be at 110.90-95; technical resistance at 111.85, 50-Day SMA

Weak UsdJpy is said to be correlated to negative Nikkei. One report said selling of equities ahead of Japanese corporate earnings and these are all profit taking activities.

It is BOJ time. Our Tokyo colleague Haru said more than 50% of the Japanese economists are expecting a BOJ move on Thurs. There will be a new board member Makoto Sakurai, a dove, who replaces Sayuri Shirai, who is a hawk. In addition, Haru mentioned that Japanese lifers expected to announce new fiscal year investment and overseas allocation will be aggressive.
One reminder, Kuroda loves surprises.

Brexit stories dominated the weekend media –President Obama said UK could take up to 10 years to negotiate trade deals with the US if it leaves the EU and Britain would also have less influence globally if it left. At the same time, Presidential candidate Clinton made it clear she thinks it would be a mistake for the UK to go it alone. Clinton believes that transatlantic cooperation is essential, and that cooperation is strongest when Europe is united. Also, Sunday Telegraph carried a report that report that ONS, to publish its figures on Wed, will say UK economy slowed dramatically due to the forthcoming EU ref vote. ONS will report output expanded by just 0.4pc in the first three months of the year, below the 0.6pc growth enjoyed in the final quarter of 2015.

According to my colleague Wilson, stops were taken out in GbpUsd above 1.4450 and I believe it was caused by the weekend news articles. GbpUsd got to 1.4475 then drifted back below 1.4450. GbpUsd has tested 1.4500 few times, false break and came back offered. I hear large stops atop 1.4505, so be careful. Downside, bids at 1.4400.

Oil futures starts off the weak in negative on concerns of prolonged global glut – (according to Bloomberg) Saudi Aramco will complete expansion of Shaybah oilfield by end-May; Iran has increased output by 1m b/d since sanctions; and Kuwait is back.

UsdCad advanced from low of 1.2653 to 1.2693. Not much in the orderbook; light selling into 1.2710-20. Tomorrow, April 26, BOC Governor has yet another speaking opportunity, but Avery Shenfeld said likely has little to add after several recent appearances in the wake of the latest MPR. On the data front, February GDP mixes in a strong contribution from the retail sector with steep drops in real factory and wholesale output. But after January’s spike, a small 0.1% dip still leaves Q1 on track for a roughly 3½% real growth rate, even if March proves to be only flat.

Anzac Day and little I can pen on the currencies. AudUsd bids are said to be at 0.7665 while sellers at 0.7750. AudNzd yield spreads are still pointing higher for the cross. As highlighted by our trader Jon, on the long term, yield spreads point this cross to 1.20, with 1.1400 as the big breakout (see 5-year chart).

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