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FOREX: USD Mostly Higher, NZD & AUD Underperform

FOREX
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The USD BBDXY sits a touch higher in the first part of Friday dealings, the index last near 1276.7. Most of the focus has been on AUD and NZD weakness, and some modest JPY gains. 

  • Cross asset moves have been very muted in the US space, with US equity futures flat, while US Tsy yields haven't moved a great deal either. We have the US NFP print later, which will be key for the Dec Fed outcome. We expect a soft payrolls report to cement expectations of a 25bp cut from the FOMC on Dec 18 (currently 18.5bp priced) whilst a strong report would see next week’s CPI as the decider.
  • USD/JPY is down a touch, but within recent ranges, last near 150.0. The earlier wages and household spending data may not shift BoJ thinking around a potential Dec hike. Trends remain mostly positive, but real wages are flat and real household spending is still negative.
  • AUD/USD has maintained its underperforming tone, off 0.40% at this stage. We are 0.6425/30 in latest dealings. The currency has largely ignored the better HK/China equity seen so far today. The pair has been on the back foot since the Q3 GDP print earlier this week, which highlighted soft underlying private growth conditions.
  • Metals in terms of iron ore and copper are also firmer today, but the AUD isn't tracking higher with these metals.
  • NZD/USD is also weaker, last off 0.50%, to 0.5855/60, slightly outpacing A$ losses. AUD/NZD is slightly higher in latest dealings, up to 1.0970/75.
  • We had South Korea assets sell off earlier, as the opposition party stated they had intelligence on a 2nd martial law call. However, sentiment stabilized when the South Korean military said there would be no second martial law call. President Yoon is currently meeting with the PPP leader. 
  • Outside of the US NFP, we also have some Fedspeak, before the blackout period kicks in. 
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The USD BBDXY sits a touch higher in the first part of Friday dealings, the index last near 1276.7. Most of the focus has been on AUD and NZD weakness, and some modest JPY gains. 

  • Cross asset moves have been very muted in the US space, with US equity futures flat, while US Tsy yields haven't moved a great deal either. We have the US NFP print later, which will be key for the Dec Fed outcome. We expect a soft payrolls report to cement expectations of a 25bp cut from the FOMC on Dec 18 (currently 18.5bp priced) whilst a strong report would see next week’s CPI as the decider.
  • USD/JPY is down a touch, but within recent ranges, last near 150.0. The earlier wages and household spending data may not shift BoJ thinking around a potential Dec hike. Trends remain mostly positive, but real wages are flat and real household spending is still negative.
  • AUD/USD has maintained its underperforming tone, off 0.40% at this stage. We are 0.6425/30 in latest dealings. The currency has largely ignored the better HK/China equity seen so far today. The pair has been on the back foot since the Q3 GDP print earlier this week, which highlighted soft underlying private growth conditions.
  • Metals in terms of iron ore and copper are also firmer today, but the AUD isn't tracking higher with these metals.
  • NZD/USD is also weaker, last off 0.50%, to 0.5855/60, slightly outpacing A$ losses. AUD/NZD is slightly higher in latest dealings, up to 1.0970/75.
  • We had South Korea assets sell off earlier, as the opposition party stated they had intelligence on a 2nd martial law call. However, sentiment stabilized when the South Korean military said there would be no second martial law call. President Yoon is currently meeting with the PPP leader. 
  • Outside of the US NFP, we also have some Fedspeak, before the blackout period kicks in.