UsdJpy was rather lively with decent two-way business reported from 104.00 to 104.20’s. General chatter of offers from Japanese corporate lined up above 104.40 up to 105-handle. Most of the bids are listed 103.75-85 area with offshore technical accounts waiting near 103.50, which is the top of Ichimoku Cloud. Traders said AudJpy sell stops went through which took UsdJpy leg towards low 103.92. Suspect someone or people lifted EurJpy and caused UsdJpy back to 104.20.
Cable traded 1.2222 at pre-market open for no reason and opened at 1.2190. we drifted slowly towards 1.2143. Traders pointed to an article in WSJ where German Chancellor Merkel said Britain won’t get full access to the EU’s single market without agreeing to basic principles of freedom of movement for goods, services, capital and people. I believe it is also partly due to French President Hollande reiterated UK shouldn’t get concessions on freedom of movement while keeping full access to single market. Keep a watch on upside in GbpUsd; break above 1.2240 could trigger some stops as well as downside EurGbp.
EurUsd peaked at 1.0978 after the official Monday open but there was no follow through and single currency drifted to the sixties. Hearsay bids scattered around 1.0950’s and again into 1.0900. Believed to be EurJpy, EurUsd returned to 1.0970-level.
One fat finger caused UsdCad to print 1.3065 at pre-open; we calling official low 1.3112. Oil futures starting off weak, AudUsd lower – thus UsdCad lifted up. Bank of Canada monetary policy decision on Wednesday Oct 19. We believe BOC will lean on the dovish side, in sympathy with a slight downward revision to its growth outlook for 2017. Governor Poloz will mention that he’s waiting to see how upcoming fiscal stimulus plays out, but likely won’t highlight that he’s also counting on US rate hikes to keep the Cad at levels helpful for exporters.
Chinese Yuan fixed today 6.7279 in line with Gary’s call. Onshore spot USDCNY opened on this 6.73-handle – caused USDCNH to trade above 6.7400. Several exotic CNH option structures reportedly linked to 6.7500 – could get very ugly.
Another weak NODE for Singapore – September falling 4.8% from flat in August on annual basis; electronics exports worsened to -6.6% from -6.0%. UsdSgd extended to 1.3929 – where we saw some Asian prop accounts taking profit. Hearsay leveraged buyers mid-1.38’s.