BofAML’s technical strategist, MacNeil Curry, remains bullish and long the US$ but advocates caution for a potential correction against JPY and EUR in the near term aiming to use such a corrective move to position for a larger US$ bull trend. MacNeil sees EUR$ potentially retracing to 1.3445 zone with GBP$ potentially correcting to 1.6772/1.6852. Pullbacks in $JPY should be limited to 103.00 and coincides with significant off-shore interest levels. As an aside MacNeil notes that the US$ also looks set to rally against the Mexican Peso. While $/MXN could see a deeper probe of 13.0163/12.8818 support, this should be a significant base before the pair turns sharply higher for the 13.6072 Jan’14 highs, potentially 13.8319 and extensively beyond.
From Citi G10 Rates in Sydney: Another strong rally in Aussie bonds led by the long end. AU 10s have now rallied 13-14bps since Jackson Hole and the 3s10s curve has flattened by 8bps.No one I speak to is fading the rally in the long end, although most are scratching their heads about how far we’ve come, particularly given the rally has been all futures driven and we’ve seen near zero buying/receiving (long end).Will be interesting to see how the market digests tomorrows supply at current yields with 600mn ACGB 2029 and 500-1bn NSWTC 2026 on the slate.
Predicted markets: Since February this year there have been 25 times when – as on Monday – EUR/USD has finished one session at least 10 pips beneath the previous day’s low. Of the 25, only one recovered to close the next day with a net gain of more than 0.1%, the equivalent on Tuesday of 1.3220
Seems to be chatter suggesting a China RRR cut…we haven’t heard from better sources and my man in China also hadn’t heard…He is checking at the moment. From my China source.. I have a well-informed source who didn’t hear anything concrete…rumors are indeed passing among traders about a rrr cut…but many traders dismiss the rumor, saying it’s merely some foreign banks sent out fake information to lift bond prices…I will keep u updated if I hear anything more…
Talk of USDCAD stops thru 1.1030, cable stops 1.6610….and japanese demand for AUDJPY