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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FOREX
- We wrote yesterday that FX vol markets are priming for a more muted reaction to today's Budget relative to 3 of the last 4 fiscal events - with prevailing implied vols considerably lower today than they were for Kwarteng Sep'22, Hunt Nov'22 and Hunt Mar'23. That remains the case this morning, implying a ~60 pip swing in GBP/USD and ~30 pip swing in EUR/GBP, suggesting that while Reeves intends to make broad changes to fiscal rules, the structure of taxation and, thereby, the Gilt remit - the impact on the BoE's policy cycle will be minimal - and the uptick in infrastructure spending gradual enough to leave the BoE to proceed with sequential rate cuts toward neutral.
- Despite the show back above 1.30, the trend theme in GBPUSD remains bearish and short-term gains are considered
corrective. On the upside, initial firm resistance to watch is 1.3065, the 50-day EMA. A clear breach of this average is required to signal any reversal. - The greenback is softer against all others in G10 after a slow start, with a minor break lower from the contained overnight trade for US yields working against the currency and aiding new EUR/USD intraday highs, and new USD/JPY intraday lows.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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