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FOREX: Safe Havens Weaken As US Yields Firm, CAD Higher On Trudeau Headlines

FOREX
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FX trends have been mixed in the first part of Monday trade. The USD indices sit down a touch, off earlier highs, with JPY and CHF underperforming other G10 currencies. The BBDXY index was last just under 1312, still within striking distance of recent cycle highs above 1316.

  • USD/JPY has firmed but hasn't tested above 158.00. We were last near 157.70/75, around 0.30% weaker in yen terms. USD/CHF was close to 0.9100.
  • US yields have firmed, following on from recent US data beats and cautious Fed commentary around the inflation outlook. We are away from best levels from a yield standpoint, up a little over 1.5bps at the back end of the curve. The 10yr at 4.61% is short of late 2024 highs near 4.64%.
  • Comments from BoJ Governor Ueda crossed the wires earlier. The were consistent with remarks from late Dec, around the timing of the next rate move is dependent on the growth/inflation outlook and wages are a key variable.   
  • We had final PMI reads for the Japan and Australian PMIs (services) but they didn't shift sentiment. China's Caixin services PMI printed stronger than forecast, but also didn't shift sentiment greatly. Regional equity trends are mixed.
  • AUD and NZD sit higher, but still close to recent lows. AUD/USD around 0.6225, while NZD/USD is in the 0.5620/25 region.
  • EUR/USD has been supported sub 1.0300.
  • CAD is around 0.30% firmer, with USD/CAD last near 1.4400. Session lows in the pair were at 1.4388. Support for CAD was evident post local news wire headlines that PM Trudeau may resign this week ahead of a caucus meeting on Wednesday.
  • Later the Fed’s Cook speaks. US & European December services/composite PMIs and preliminary December German CPI data are released.
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FX trends have been mixed in the first part of Monday trade. The USD indices sit down a touch, off earlier highs, with JPY and CHF underperforming other G10 currencies. The BBDXY index was last just under 1312, still within striking distance of recent cycle highs above 1316.

  • USD/JPY has firmed but hasn't tested above 158.00. We were last near 157.70/75, around 0.30% weaker in yen terms. USD/CHF was close to 0.9100.
  • US yields have firmed, following on from recent US data beats and cautious Fed commentary around the inflation outlook. We are away from best levels from a yield standpoint, up a little over 1.5bps at the back end of the curve. The 10yr at 4.61% is short of late 2024 highs near 4.64%.
  • Comments from BoJ Governor Ueda crossed the wires earlier. The were consistent with remarks from late Dec, around the timing of the next rate move is dependent on the growth/inflation outlook and wages are a key variable.   
  • We had final PMI reads for the Japan and Australian PMIs (services) but they didn't shift sentiment. China's Caixin services PMI printed stronger than forecast, but also didn't shift sentiment greatly. Regional equity trends are mixed.
  • AUD and NZD sit higher, but still close to recent lows. AUD/USD around 0.6225, while NZD/USD is in the 0.5620/25 region.
  • EUR/USD has been supported sub 1.0300.
  • CAD is around 0.30% firmer, with USD/CAD last near 1.4400. Session lows in the pair were at 1.4388. Support for CAD was evident post local news wire headlines that PM Trudeau may resign this week ahead of a caucus meeting on Wednesday.
  • Later the Fed’s Cook speaks. US & European December services/composite PMIs and preliminary December German CPI data are released.