USD/JPY 2020 high in focus

USD/JPY bulls at the foot of 110; having fallen as low as 108.31 EBS Monday, it has since rallied back above 109.00 and looks poised to test 110.00, if not the 110.30 high of the year from Jan 17.

USD/JPY remains bid, following Tuesday's China stimulus-related rise, putting in a new 13-day high at 109.83 in early NorAm. Granted, there will be headwinds from Japanese exporter offers which have trailed up from the high-108 area, but the sales may not be as aggressive as earlier this month, with many companies still assessing the effects of the virus contagion on global and regional trade.

US NFP Friday in focus, if NFP/earnings beat light gamma above recent highs may provide add'l boost to USD.

G10 currencies are quiet this morning

Monday’s risk rally was extended and intensified Tuesday as some fears about the novel coronavirus ebb. Risk-on trade lifted the Nasdaq (+2.1%) to a new closing record. The S&P 500 (+1.5%), Dow Jones Industrial Average (+1.4%), and Russell 2000 (+1.5%) followed suit with gains of about 1.5%. Emerging market currencies gains versus the greenback while China’s yuan rallies above 6.9900 against the dollar.

G10 currencies are quiet this morning. AUD is a marginal outperformer after Lowe reiterated the RBA is no rush to ease. Reported Coronavirus cases rose to 24K, maintaining the 20% daily growth rate.

EUR/USD sees further erosion of the rally from January’s low. Big U.S. equity market gains and a big rally in UST yields, which widened German-U.S. yield spreads helped to drive EUR/USD below 1.1040.

GBP/USD’s break below 2020’s low and support at 1.2955, to a new low at 1.2942, was short-lived. Upbeat risk sentiment and PMI beat trump lingering Brexit fears.
USD/JPY climbed above 109.25 on the back of higher U.S> yields and risk-on trading as recent virus-related haven flows unwind.
AUD/USD reverses direction after setting a 4-month low on Tuesday Asia trade. Flows out of safe havens and into high beta and emerging market currencies, along with gains in copper helped propel AUD/USD towards 0.6740.

Day ahead: Today brings final clues on Friday’s US payrolls report in the form of the ADP employment change and the ISM non‐manufacturing report. The ADP report has largely been a contrarian indicator for payrolls in recent months and should be ignored. The employment component of the ISM has had a better track record recently and a reading around 54 (previously 54.8) would be consistent with the consensus for payrolls (160K). Outside the US, Canada reports December trade figures. There are a number of interesting central bank speakers today, including the BoC’s Wilkins ECB President Lagarde and Chief Economist Lane.

FOREX Daily Pivot Points 04.02.2020

FOREX Calendar-Economic Release 04.02.2020

USD/CHF has bounced somewhat off of Friday’s lows

USD/CHF has bounced somewhat off of Friday’s lows as risk in general has rallied so far this week. The fiasco overnight in Iowa appears to be viewed as a risk-positive – given it is likely helpful to Trump -- if the overnight moves are any guide. With the risk on theme during today's Asian session USD/CHF is testing the short-term resistance coming in at 0.9680. The next levels in USD/CHF then are 0.9710 and 0.9760/70.

EUR/CHF is testing the short-term technical resistance at 1.0717, overall the down trend channel is still in play with the pivots coming in at 1.0740 and 1.0630. It will be interesting to see if the sentiment can hold up with the start in Europe very often we have seen in it the past month that the sentiment changed once Europe walked especially for EUR/CHF.

FTSE 100 започна февруари с покачване

Британските акции започнаха февруари със скромно покачване, тъй като британският паунд (GBP) рязко се обезцени на фона на притесненията за твърд Brexit. Борсовият индекс FTSE 100 се повиши с 0,55% до 7 326 пункта, докато GBP спадна с 1,56% спрямо щатския долар (USD) до $1,2990 и с 1,25% спрямо еврото (EUR) до £0,8507, тъй като премиерът Борис Джонсън заяви, че няма нужда Великобритания да следва правилата на Европейския съюз като част от бъдеща търговска сделка.

Премиерът заяви, че Уестминстър иска споразумение за свободна търговия в стил „Канада“ с ЕС, но добави, че Обединеното кралство е готово да се отдалечи от преговорите, вместо да приеме исканията на ЕС да се подпише на регламенти за единен пазар.

Говорейки в Брюксел по-рано, главният преговарящ за Brexit на ЕС Мишел Барние заяви, че блокът е готов да предложи "изключително амбициозна" търговска сделка с нулеви тарифи за стоки. "Изключителната оферта" зависи от привеждане в съответствие със стандартите на ЕС и гарантиране, че конкуренцията остава "открита и честна", каза той. Барние заяви, че трябва да има равнопоставени условия "в дългосрочен план".

По-слабият GBP има тенденция да повишава индекса FTSE100, тъй като около 70% от изграждащите го компании получават по-голямата част от приходите си от чужбина.