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FOREX: Further Pricing of Less Easy Fed Leads USD/JPY (Briefly) Above 149

FOREX
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  • JPY trades stronger off lows early Monday, with USD/JPY initially extending the NFP-inspired rally on the resumption of trade - helping the pair touch 149.13, before reversing through the European open to trade lower. Risk sentiment is mixed as markets continue to price in a lower likelihood of a second Fed 50bps rate cut, with the US 10y yield popping back above the 4.00% mark for the first time since early August.
  • Elsewhere, NOK and CAD sit stronger on the back of continued tensions in the Middle-east. Further strength in oil prices this morning puts WTI at new multi-month highs, helping press EUR/NOK toward first support at the 11.6637 100-dma.
  • USD/CNH now the only major currency pair to have reversed the NFP-inspired USD rally, with the pair now below 7.07 mark to narrow in on the Friday low of 7.0471. This firms the 50-dma as notable resistance on any further rally (today at 7.1128), while 7.0377 marks the first major downside target (50% retracement of upleg off the cycle low at 6.9713.
  • Tier one data releases are few and far between Monday, keeping focus on the much busier speaker schedule. Markets are expecting appearances from ECB's Escriva & Nagel, as well as Fed's Bowman, Kashkari, Bostic and Musalem - the last of which should prove most relevant for policy expectations - although comes after the close. 
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  • JPY trades stronger off lows early Monday, with USD/JPY initially extending the NFP-inspired rally on the resumption of trade - helping the pair touch 149.13, before reversing through the European open to trade lower. Risk sentiment is mixed as markets continue to price in a lower likelihood of a second Fed 50bps rate cut, with the US 10y yield popping back above the 4.00% mark for the first time since early August.
  • Elsewhere, NOK and CAD sit stronger on the back of continued tensions in the Middle-east. Further strength in oil prices this morning puts WTI at new multi-month highs, helping press EUR/NOK toward first support at the 11.6637 100-dma.
  • USD/CNH now the only major currency pair to have reversed the NFP-inspired USD rally, with the pair now below 7.07 mark to narrow in on the Friday low of 7.0471. This firms the 50-dma as notable resistance on any further rally (today at 7.1128), while 7.0377 marks the first major downside target (50% retracement of upleg off the cycle low at 6.9713.
  • Tier one data releases are few and far between Monday, keeping focus on the much busier speaker schedule. Markets are expecting appearances from ECB's Escriva & Nagel, as well as Fed's Bowman, Kashkari, Bostic and Musalem - the last of which should prove most relevant for policy expectations - although comes after the close.