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USD, JPY Make Modest Gains Ahead of NY

FOREX
  • The greenback sits furtively higher ahead of the Tuesday crossover, although recent ranges have largely been respected headed into US hours. Inching higher of the dollar puts EUR/USD within range of the Friday lows at 1.0967. Any weakness through here would shift downside focus to the 50-dma, sitting just below at 1.0855.
  • Equity futures are lower across the board, although the pullback has been relatively contained so far. The softer equity backdrop is working in favour of the JPY, which is modestly firmer against all others in G10.
  • AUD, NZD are toward the bottom-end of the pile amid relatively thin trade overnight.
  • More broadly, markets are treading water ahead of the US CPI release due Wednesday, ahead of which overnight implied USD vols are on the front foot: EUR/USD overnight vols have cleared 12 points - roughly matching the levels seen ahead of the March CPI release back on April 12th.
  • Focus Tuesday is solely on the speaker slate, as ECB's Vasle, Vujcic, Villeroy and Schnabel are all set to speak. Fed's Jefferson and Williams are also on the docket.

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