FOREX: EURJPY Bearish Momentum Extends Below 158.00
Feb-06 12:26
- EURUSD’s firm rejection of the 50-day EMA on Wednesday keeps bearish momentum for EURJPY at the forefront of G10 FX sentiment, with the cross extending session lows in recent trade below 158.00.
- A more hawkish BOJ narrative and ongoing growth concerns in the Eurozone have provided headwinds for EURJPY, and losses now tally over 3% on the year. Notably, bearish momentum has extended on the break back below the pivotal 160.00 mark.
- Trendline support from the August low intersects around 157.65, which if broken, would signal scope for a move towards 156.18, the Dec 3 low and a key support. Below here, greater attention will be on the medium-term cluster of support between 153.27 and 154.46.
- We noted yesterday that SocGen continue to favour EURJPY shorts, describing the deterioration in Eurozone growth expectations relative to Japan as “striking". Additionally, Rabobank recently said a close below the 152.70 area for USDJPY may result in an acceleration of the downside trend, and they retain a medium-term target of 145.00, seeing downside risk to this forecast.
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PIPELINE: Corporate Issuance Roundup: $6B EIB on Tap
Jan-07 12:23
Hard act to follow after Monday's record $59.55B corporate debt issuance - would have been a record even without $12B Saudi Arabia & $8.5B Mexico multi-tranche issuance. European Investment Bank (EIB) leads so far today with $6B 5Y SOFR:
- Date $MM Issuer (Priced *, Launch #)
- 01/07 $6B European Investment Bank (EIB) 5Y SOFR+42
- 01/07 $500M DBJ WNG 10Y SOFR+73
- 01/07 $Benchmark World Bank 7Y +54
- 01/07 $Benchmark ADB 3Y SOFR+31
- 01/07 $Benchmark CIBC 5Y SOFR+75a
- 01/07 $Benchmark Kommunalbanken 5Y
- 01/07 $Benchmark Ontario 5Y SOFR+60a
- 01/07 $Benchmark Santander 5Y +135a, 10Y +160a
- 01/07 $Benchmark Kexim 3Y +55a, 3Y SOFR, 5Y +75a, 10Y +90a
- 01/07 $Benchmark SMFG 5.25Y +100, 5.25Y SOFR, 7Y +110a, 10Y +120a
OUTLOOK: Price Signal Summary - Bear Cycle In Gilts Remains Intact
Jan-07 12:11
- In the FI space, the trend cycle in Bund futures remains bearish and last Friday’s sell-off plus Monday’s extension, reinforces this theme. Sights are on key support at 132.00, the Nov 6 low. Clearance of this level would strengthen a bearish theme. Initial resistance is seen at 133.48, last Friday’s high. Key short-term resistance is at 134.10, the 20-day EMA.
- The trend condition in Gilt futures is unchanged, it remains bearish and recent short-term gains appear to have been corrective. The recent breach of 91.87, the Dec 19 low, confirmed a resumption of the downtrend. Sights are on 91.58 next, a 4.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 92.08, the Jan 2 high. Resistance at the 20-day EMA, is at 93.16, and the average is seen as an important hurdle for bulls.
EURIBOR OPTIONS: Put spread seller
Jan-07 12:03
ERG5 97.625/97.50ps 1x2, sold at 2.75 in 2.5k.
