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Under renewed pressure


TTF Falls Back as Market Assesses LNG Fire Impact


FX Exchange traded rolls

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FOREX: Fed shock and awe strategy has limited shelf life
- For the first time since the depths of the financial crisis the Fed chose to
cut rates inter-meeting. Powell and the board cited risks to the outlook from
the spread of Coronavirus as the thinking behind the move and cut 50bps. Given
how aggressively rates, currency and equity markets have been pricing in
near-term action, the half-life of the support for markets was brief and the
upside in equities lasted all of ten minutes. Subsequently, equity futures
turned back lower and markets reversed much of the USD weakness to keep most
pairs on a relatively even keel. Interestingly, markets are still eyeing further
action from the Fed, with another March 25bps cut still fully priced.
- CAD weakened sharply and was the poorest performer in G10 as traders suspect
the Fed's actions Tuesday will force the BoC to match at their Wednesday
meeting. AUD, on the other hand, is the strongest as the RBA response was seen
as lacking, despite their 25bps easing.
- The BoC decision, Australian GDP, China Caixin PMI, US ADP employment and ISM
non-manufacturing data take focus Wednesday. BoE's Bailey & Broadbent speak.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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