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CROSS ASSET: Some disconnect between FX and Rates ahead of the Fed

CROSS ASSET
EquitiesBulletMarketsFixed Income BulletsForeign Exchange Bullets
  • The Dollar is still trading in the red going into the US session and ahead of the key event for the day, the Fed which at minimum will cut by 25bps, while the 50bps cut is still debated among Desks.
  • Despite the pullback lower in Treasuries futures, higher Yields as investors trim long in Bonds since the inline Retail Sales Yesterday, the Dollar has not really benefitted from the cross asset price action.
  • The Yen was the overnight and the early best performer in G10 during the European session, but has been taken over by the Kiwi, now up 0.53% vs the Greenback.
    The higher Yield has also not been supportive of the USDJPY, as the pair trades closer to the intraday low, just 40 pips off at the time of typing.
  • There seems to be some disconnect between FX and Rate markets, as Govies and Rates futures see more of an Hawkish price action so far in early trades going into the US session.
  • The UK CPI was bang inline with the Consensus, but this was still taken on the Hawkish since market participants were most likely looking for a miss.
  • Cable is pushing back above 1.3200, has gained 58 pips since the UK Data.
    Resistance in Cable remains at that last US NFP peak of 1.3238, failed there Yesterday at 1.3230.
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  • The Dollar is still trading in the red going into the US session and ahead of the key event for the day, the Fed which at minimum will cut by 25bps, while the 50bps cut is still debated among Desks.
  • Despite the pullback lower in Treasuries futures, higher Yields as investors trim long in Bonds since the inline Retail Sales Yesterday, the Dollar has not really benefitted from the cross asset price action.
  • The Yen was the overnight and the early best performer in G10 during the European session, but has been taken over by the Kiwi, now up 0.53% vs the Greenback.
    The higher Yield has also not been supportive of the USDJPY, as the pair trades closer to the intraday low, just 40 pips off at the time of typing.
  • There seems to be some disconnect between FX and Rate markets, as Govies and Rates futures see more of an Hawkish price action so far in early trades going into the US session.
  • The UK CPI was bang inline with the Consensus, but this was still taken on the Hawkish since market participants were most likely looking for a miss.
  • Cable is pushing back above 1.3200, has gained 58 pips since the UK Data.
    Resistance in Cable remains at that last US NFP peak of 1.3238, failed there Yesterday at 1.3230.