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USD/JPY Fading Alongside Equities

FOREX
  • USD/JPY has faded off the cycle highs posted yesterday at 137.00, but still holds comfortably above yesterday's lows. Nonetheless JPY is the strongest currency across G10, moving in sympathy with fading equity markets. This puts the e-mini S&P on track to test first support at 3757.8 - the 61.8% Fib retracement for the late June rally.
  • Elsewhere, the SEK trades weaker, with EUR/SEK toward the top end of the daily range following the Riksbank rate decision. There were mixed messages in the release, with the bank hiking 50bps (potentially disappointing markets that had seen a decent chance of a 75bps move) and pointing to an elevated rate path across 2023 - this puts the repo rate path north of 2% by mid-2023.
  • The USD Index is inching higher, mirroring the general risk-off theme so far present in markets Thursday, with 105.229 the next upside level ahead of June's cycle high of 105.788.
  • Alongside the weekly jobless claims data, personal income/spending data is due as well as Monthly Canadian GDP. The MNI Chicago PMI follows, expected to show a drop to 58.0 from 60.3.
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  • USD/JPY has faded off the cycle highs posted yesterday at 137.00, but still holds comfortably above yesterday's lows. Nonetheless JPY is the strongest currency across G10, moving in sympathy with fading equity markets. This puts the e-mini S&P on track to test first support at 3757.8 - the 61.8% Fib retracement for the late June rally.
  • Elsewhere, the SEK trades weaker, with EUR/SEK toward the top end of the daily range following the Riksbank rate decision. There were mixed messages in the release, with the bank hiking 50bps (potentially disappointing markets that had seen a decent chance of a 75bps move) and pointing to an elevated rate path across 2023 - this puts the repo rate path north of 2% by mid-2023.
  • The USD Index is inching higher, mirroring the general risk-off theme so far present in markets Thursday, with 105.229 the next upside level ahead of June's cycle high of 105.788.
  • Alongside the weekly jobless claims data, personal income/spending data is due as well as Monthly Canadian GDP. The MNI Chicago PMI follows, expected to show a drop to 58.0 from 60.3.