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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.
AUD
- Overnight vols are uniformly higher across G10 FX as the market captures today’s FOMC decision, but the risk premium added is most notable in AUD, with overnight implied rising close to 8 points and touching a new YTD high of 18.5 points in the process – pressing the break-even on an ATM straddle to around 45 pips.
- While there’s little directional skew in front-end of the AUD/USD risk reversals curve (1w risk reversals are inline with longer-run averages), markets remain cognizant of the hawkish risks surrounding today’s Fed meeting, with some on the sell-side eyeing potential for more hawkish language on the characterization of inflation.
- A negative AUD/USD reaction to today’s Fed decision eyes the Apr22 low of 0.6407 ahead of the bear trigger at 0.6363 – although options markets are pricing a very low likelihood of such a move into the Thursday NY cut.
- More broadly, AUD getting little/no support from rallying Chinese markets also bodes poorly for the currency. The near 15% rally off lows for the CSI 300 has done little to reverse the outright short positioning in the currency – last week’s CFTC report showed little recovery from the largest short position on record in AUD, which currently amounts to ~40% of open interest.
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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