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CROSS ASSET

Commodity-Tied Dollar Bloc Leads

JGBS

Cheaper On Wider Impetus

AUSSIE BONDS

YM Off Lows, Trouble Staying Offered In Wake Of GDP

FED

VIEW: BNP Paribas: Faster Tapering

US EURODLR FUTURES

Some Light Selling Seen

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  • Fed Chair Powell's stance doesn't seem to have changed significantly in recent weeks despite a surge in market rate hike pricing. While his comments initially lent support to the greenback, this price action quickly reversed and USDJPY made fresh weekly lows.
  • USDJPY has now fallen for three days, edging back towards 113.50, consolidating on the sharp rally from 109 in late September. Dips are still considered technically corrective with initial firm support seen at 112.08, Sep 30 high and a recent breakout level.
  • GBP was the worst G10 performer on Friday and the weakness was exacerbated as headlines dropped suggesting the EU could weigh terminating the post-Brexit trade deal if the U.K. government pulls out of its commitments over Northern Ireland.
  • An already weak GBPUSD, shot to fresh lows of 1.3836 before stabilising into the close. Interestingly, for the sixth day in a row, EURGBP has made lows between 0.8422-24 before finding support. While the price action has remained broadly GBP supportive, today's rally marks the most meaningful bounce in the cross, rising back above the August lows to a high of 0.8468.
  • In emerging markets, USDTRY continued its ascent, rising close to 1% and breaching 9.60 and printing fresh all-time highs of 9.6625. RUB bucked the trend following the surprise 75bp hike from the CBR prompting an extension of USDRUB weakness. After briefly breaching the 70.00 mark, the pair approaches the close down close to 1% at 70.35.
  • A busy central bank schedule for next week, with monetary policy decisions from the Bank of Canada, the Band of Japan and the European central Bank.
  • German IFO on Monday and AUD CPI Tuesday are early data points of note.