FX Flows: FXWW

From the FXWW Chatroom: New Zealand Sept building permits fell 2.3% and revision was reduced to +5.9% from previous month of +10.2%. No reaction to the NzdUsd. Earlier, reported in RNZ, Kiwi Finance Minister Grant Robertson said drop in value of Nzd is a natural thing after a change in government. He is not especially concerned about the currency dropping below 0.7000. Oct business activity and confidence were weak as well but nothing changed in currency market. Nzd is still holding in the 0.6870’s. We heard from yesterday offers are scattered in the 0.6890’s linked to this 0.6895 option strike which is maturing today New York cut for Nzd500mio. Downside bids are at 0.6830.

Was it trigger of stop sell orders in UsdJpy or market expecting a weak Nikkei opening? We got to low 112.97, which is also the Ichimoku Cloud baseline. Suspect we might see more sellers especially above 113.30. Heard there are bids for this 113.00 option strike which will mature coming 2 weeks totalling $4-plus bn. Some UsdJpy fixing demand met with AudJpy supply, prevented Usd from heading above 113.18. Nothing changed from BOJ – short covering from intraday accounts sent UsdJpy to 113.29.

Initially AudNzd was bought, helped the AudUsd testing 0.7700. Good things don’t last. Some said macro name was offering AudUsd near the 200-Day SMA 0.7695. AudJpy was sold and the Chinese PMI confirmed the AudUsd low 0.7676.

Short position in Gbp has been reduced, a lot. We have been locked in tight rang in month of Oct and we are likely to break this. Market is focused on Thursday’s MPC meeting, is rate hike on the table? Most media are calling for rate hike. The Telegraph wrote today, there are 2 threats looming – the massive consumer debt piled onto households and Brexit. Yesterday, Roger Bootle said it is justifiable for BOE rate hike, I think this will be very close call. GbpUsd backed away from 1.32-handle, bids are distant, near 1.3070-80 (100-Day SMA is at 1.3072), sell order 1.3280-1.3300.

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