Calendar Week 26-2023

 

After a week off attending a trade expo, I note it has been a week of risk off. The week also saw the market view of China stimulus as lacking so also commodities got punished. A very short lived “coup” in Russia might turn that around, particularly in oil, but overall I think the rebellion will have little impact on markets.

Stocks got sold off thanks largely to poor data and hawkish central banker talk. This lead to buying in crypto and greenbacks, but notably not Yen or gold.

 

Both the SNB and BOE raised rates as safe haven flow supported the short end of interest rates whilst the long end tracked sideways.

 

Week ahead should focus on CPI from AUD, CAD, EUR and JPY. GDP from USA and all the talking heads on one stage at once.

 

Currency Guidance

 

USD – The Greenback was the beneficiary of safety flow and bounced nicely off support of 102. Short term it is a little hot and could track back to the mid 102’s but I see this as rotating higher back to 105 in the mid term.

 

AUD – As I wrote two weeks ago, this pair moved to far and should fall back to 66. With the Chinese picture still bleak and Canberra stupidly weak, the Aussie has fallen back into the middle of the range it has been in for 4 months now, 65/69 or tighter of 66/68. Don’t see it getting out of that any time soon.

 

EUR – Looking to fade this off 1.0920 resistance zone as we walk into northern summer and the traditional sell off in stocks during this period supports a stronger USD.

 

GBP – Is retracing back to support and if buyers step in at the mid 1.26’s this could be worth looking at going with them.

 

JPY – With yen buyers noticeably absent we are getting closer to the BOJ’s line in the sand at 145. Too hot to buy or sell it right now though.