FX Flows

From the FXWW Chatroom: Again, Japanese banks were buyers of UsdJpy and ran into resistance in the 112.50’s, failed to erase overnight high of 112.575. UsdJpy backed away to 112.20’s amid lower UST yields. We should see some buying near 111.80-90. There is an option expiry this Fri Feb 10 strike 112.00 for $1.5bn. Meanwhile, EurJpy is struggling near this 120.00.PM Abe will meet President Trump later this week and Japanese leader wants to forge a personal bond with Trump and leaning to pledge billions of Usd to US infrastructure projects. However, there is an article in Nikkei out this morning that Japan is now the #2 contributor to US trade deficit. Wonder what Trump will say when they golf on Sat.

EurUsd printed low 1.0668 at the turn of the hour 8.00 am HK; we suspect that was some systematic trade. EurUsd then climbed towards 1.0690 as UsdJpy headed towards the 112-teens. Chatter of fresh offers lined up into 1.0720’s. Option expiry today strike 1.0650 NY cut for Eur1.42bn.

Keep an eye on this Greek report. Telegraph said IMF officials are increasingly unwilling to fund endless bailouts for Greece passing more of the burden onto the EU – at a time when Germany does not want to keep sending cash to Athens.Most got burnt by GbpUsd or murdered. Earlier in morning, British MPs rejected the bid to force government to consult parliament on Brexit bill. Small EurGbp flow caused GbpUsd to back away from 1.2510 to 1.24-‘s. 100-Day SMA at 1.2451 and there is a decent option strike at 1.2550 maturing today NY cut.

API announced that US crude inventory up 14.2mio barrels last week, this is biggest rise in stockpiles since last Oct. Oil futures slide following this report which came out late NY. UsdCad was slow to react, traded towards 1.3200 then pared gains into late morning.

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