FX Flows

From the FXWW Chatroom: UsdCad is probably the only pair moving, edging up from open of 1.3334. Offers seen above 1.3360 while bids are very light/distant. Price of oil futures starting off weak, adding to Cad pressure. Also earlier today TD Ameritrade announced and TD Bank announced they are nearing a deal to buy Scottrade Financial for $4bn. TD Ameritrade will pay $2.7bn in cash and stocks while TD will pay $1.3bn in cash for the banking ops.

No major economic reports in Canada this week. BOC Governor Poloz and his deputy Carolyn Wilkins will appear before the House of Commons Standing Committee on Finance today at about 3.30pm Toronto.

Holidays in New Zealand and Thailand. Overall, Usd stronger across both G10 and EM.

UsdJpy attempted 104.00 but backed away when Tokyo opened. Sellers were said to be exporters; normal offers heard above 104.20 while same talk surrounding 104.55 from last week. Japan traders watching downside Ichimoku Cloud at 103.50. Preliminary Nikkei manufacturing PMI continues to grow in Oct at 51.7 from 50.4. Option strikes expiring today, 104.00 for about $1.5bn and larger $2.35bn at 105.00.

EurUsd has drifted lower since this morning – there were some chatter of selling from sovereign name without confirmation. Heard corporate demand at 1.0850. There is a decent strike at 1.0900 option maturing tomorrow New York cut, for about Eur2.4bn.

GbpUsd revisited 1.21-handle. The failed CETA talks has brought about some argument about Brexit negotiations. Most experts said the rejection by Wallonia will mean an even tougher Brexit negotiation. But 2-3 macro said to watch for Monday. The EU has given Belgium until late on Monday to overcome opposition. If they do manage to scrap through for an agreement, means that EU officials work towards a soft Brexit.

Bank of England Deputy Governor Minouche Shafik speaks at  International Monetary Fund/BOE/HKMA Conference today, speech covers `monetary, financial and prudential policy interaction in the post-crisis world.

I am struggling to write something about Aussie. They lost to All Blacks in the Bledisloe Cup. AudUsd drifted unexcitingly. There are bids on downside near 0.7550 I hear but I suspect gamma play ahead of this 0.7575 option which expires on Oct 27 New York cut worth Aud1.2bn.

Similar price action in Kiwi. Our guys are still keeping short position without any change made to the stops.

Emerging Market
USDDCNY fixed today at 6.7690 and the onshore spot opened higher at 6.7733 versus Friday’s close of 6.7655. That lifted an “already bid” USDCNH, from 6.7775 to 6.7842. There was an option structure at 6.7800 taken out, which also caused some of the momentum. There are some more barriers on top and big one is now 6.8000.
(CIBC)
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