Signs of hesitancy are creeping into the market if our flow is anything to go by. Overall, we’ve seen reasonable net USD demand. Most of this as a result of selling in EURUSD. Our flow has a 53% bias, which might not sound much, but turnover is high. The potential mismatch is large and it would have an impact if it unwound. It might be worth noting that leveraged names are net buyers. We’ve seen above average turnover in EURGBP characterized by good net buying. This has increased following the strong bounce from around 0.7010.
Cable turnover is also above average and leveraged names have been the standout sellers as it sinks towards 1.5000. Our JPY turnover is contrarian against arguably both the USD and the EUR. We’ve seen small net selling in USDJPY and turnover is below average. In contrast we’ve seen small net buying in EURJPY, with turnover above average. It’s been a game of two halves for AUDUSD. Net selling has flipped to small net buying. The demand is from real money. It seems everyone else is happy to sell. The Kiwi is attracting selling as the market waits for the RBNZ decision on rates later. Turnover is above average and leveraged names in particular are wielding the ugly stick. Finally, there’s not a great deal to say about USDCAD. Turnover is below average and there’s no bias in our flow.
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