From the FXWW Chatroom: The week started off very slow – volume was low for good 4 hours since the official open. Didn’t really pick up after Tokyo opened.
EurUsd has done 1.1595-15, no one seemed interested and there was some gamma adjustment. First resistance comes in at 1.1660-65, then 100-Day SMA at 1.1683. there are several 1.1650 option strikes maturing this week totalling Eur2.44bn and about Eur3bn of 1.1600 strikes. Downside option barriers 1.1550 and 1.1500.
Earlier this morning, ECB Governing Council member Jan Smets in the Handelsblatt said it is right ECB gave no end date for bond-buying program. Over in Spain, several newspapers reported that hundreds of thousands of people took to the streets of Barcelona on Sunday to call for Spanish unity. Central government has warned that Catalan President Puigdemont could be jailed within two months.
UsdJpy traded 113.63-825. Slight Goto-bi fixing demand but that soon died and UsdJpy slipped back to high-60’s. Nikkei started to pare gains and slipped into red added more pressure, tested 113.52. The intraday support 113.30. Offers are mentioned near 114.00, think better at 114.20-30 and 114.50. Interesting option strikes maturing this week – we have some $3.5bn worth at 114.00; $2.2bn at 113.00; and nearly $3bn at 115.00. BOJ policy meeting tomorrow, nothing expected. Weekend report in Nikkei said Governor Kuroda is likely to get another term.
In Cable, focus is on BOE MPC meeting this week. Over the weekend, FT produced a report by UBS/PwC Billionaires Report 2017, rising to $6trln and this boom is a signal that interest rates need to rise. Sunday Telegraph reminded us that Governor Mark Carney and his colleagues at the Bank of England have signalled clearly that there is a good chance that rates will rise this week. Mortgage rates have moved and if this is the start of a tightening cycle then home owners face rising costs. It could suck money out of the economy, too, helping to keep inflation and growth stable but also hurting those with substantial d: CIBC
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