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Risk Currencies Outperform Yen, As Restraint Called For In Israel/Iran Conflict

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The BBDXY sits little changed for Monday's session to date, last near 1259. This masks divergent trends within the G10 space though, with early yen and CHF gains giving way to a risk on feel for FX markets.

  • USD/JPY has climbed to fresh cyclical highs, last at 153.80/85, around 0.40% weaker in yen terms versus end Friday levels in NY. Earlier lows were just under 153.00, as the market opened cautiously after the weekend Iranian missile/drone attacks on Israel.
  • However, with the UN/G7 calling for restraint and US President Biden reportedly telling the Israeli leader the US would not participate in retaliatory attacks, has aided risk appetite as the session has progressed.
  • Macro markets have reversed some of Friday's trends, with US equity futures up close to 0.30%, while US yields are higher across the benchmarks. USD/CHF is a touch higher, last near 0.9145.
  • AUD is among the stronger G10 performers, up around 0.25%, last above 0.6480. Two other sources of support have been evident for the A$, with firmer China equities helping, along with a bounce in metal prices following US and UK sanctions on Russia.
  • The Kiwi is mixed today, up only against the JPY, CHF and unchanged against the USD. NZD/USD was last near 0.5945. The RBNZ released a piece earlier where they suggest the OCR is "Contractionary" above the neutral cash rate of 3.9%, while NZ PSI saw its biggest contraction in two years falling from 53 to 47.5.
  • Looking ahead, the Fed’s Logan and Williams appear and March retail sales and April Empire manufacturing are released. The ECB’s Lane and BoE’s Breeden speak, and euro area February IP is released.
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The BBDXY sits little changed for Monday's session to date, last near 1259. This masks divergent trends within the G10 space though, with early yen and CHF gains giving way to a risk on feel for FX markets.

  • USD/JPY has climbed to fresh cyclical highs, last at 153.80/85, around 0.40% weaker in yen terms versus end Friday levels in NY. Earlier lows were just under 153.00, as the market opened cautiously after the weekend Iranian missile/drone attacks on Israel.
  • However, with the UN/G7 calling for restraint and US President Biden reportedly telling the Israeli leader the US would not participate in retaliatory attacks, has aided risk appetite as the session has progressed.
  • Macro markets have reversed some of Friday's trends, with US equity futures up close to 0.30%, while US yields are higher across the benchmarks. USD/CHF is a touch higher, last near 0.9145.
  • AUD is among the stronger G10 performers, up around 0.25%, last above 0.6480. Two other sources of support have been evident for the A$, with firmer China equities helping, along with a bounce in metal prices following US and UK sanctions on Russia.
  • The Kiwi is mixed today, up only against the JPY, CHF and unchanged against the USD. NZD/USD was last near 0.5945. The RBNZ released a piece earlier where they suggest the OCR is "Contractionary" above the neutral cash rate of 3.9%, while NZ PSI saw its biggest contraction in two years falling from 53 to 47.5.
  • Looking ahead, the Fed’s Logan and Williams appear and March retail sales and April Empire manufacturing are released. The ECB’s Lane and BoE’s Breeden speak, and euro area February IP is released.