Investment Bank Outlook 26-08-2021
CIBC
FX Flows
AUDUSD and NZDUSD slipped after the Tokyo fix, AUDUSD began to back away from 0.7275, towards 0.72565. NZDUSD move lower, though much lesser extent, from 0.6970 to 0.6959. AUDUSD offers are mentioned above 0.7290 and hearsay more close to 0.7310. Strong resistance 0.7335 while intraday support comes in near 0.7230. Would see NZDUSD sellers above 0.6980 to 0.7000. We will have the New Zealand August consumer confidence tomorrow and business confidence next week.
USDJPY was bought on back of JPY cross, sellers came in soon after, I was informed that part of them were the Japanese retail day traders – profit taking – I guess the rest were exporters. USD declined to 109-handle. Intraday support comes in around 109.39, I am certain that the Mrs Watanabe will come in from 109.50. NHK carried a headline that Japanese ruling party LDP is to hold leadership election on September 29.
Another mover is USDCAD. Oil price futures are stable, October contract slipped below $68 but not too much but USDCAD goes bid. No news whatsoever, we did see one European name nipping on EURCAD near 1.4840 and one big asset manager recommended buy below 1.2580 with stop below the 200-day SMA. Option strikes for today, a total of $1.65bn worth 2.2695-1.2705.
Very little or even nothing to talk about the Euro and the pound. Note that there are total of nearly EUR3bn of 1.1700 option strikes due today and tomorrow. Couple of big ones for tomorrow.
Credit Agricole
Asia overnight Sentiment softened in Asia as the Jackson Hole Symposium nears and investors remain nervous about a potentially hawkish tilt by Chairman, Jerome Powell. Adding to nerves a little today was a 25bp rate hike by the BoK, the first central bank of a major Asian economy to raise rates. The BoK shows that despite rising infections, a central bank can hike rates. The market turned a bit dovish towards Powell’s address following the RBNZ holding off hiking rates last week. But it is also worth noting that the RBNZ Assistant Governor, Christian Hawkesby, said Tuesday this week that the reason the central bank held off hiking rates was the trouble of communicating a rate hike while the NZ economy was going into lockdown. Most Asian bourses and S&P500futures were trading lower at the time of writing. The JPY and USD were the strongest performers in the G10 in the Asian session and the CAD and AUD the worst performers.
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