EUROPE: Little Net Reaction In Bunds To EU Steel Quota Exclusive
Mar-19 12:34
Little net reaction in Bund futures to the latest Reuters exclusive detailing EU plans to tighten steel import quotas by a further 15% from April. Futures are +31 ticks at 128.18 at typing, well off earlier session highs of 128.66 (following risk-off induced by Turkish political turmoil).
- The Reuters story follows an FT article two days ago detailing plans for an EU probe into the aluminium market, which is also aimed at protecting regional manufacturers from a surge in cheap imports in response to widespread US tariffs.
- The threat of trade diversion to the EU has been referenced as a possible disinflationary force by ECB officials in recent weeks, with China in particular focus.
- The move highlights the EU’s activist approach in responding both directly and indirectly to US trade policies.
- At yesterday’s MNI Connect event, Bank of Finland Governor Rehn (who was previously European Commissioner for Economic and Monetary Affairs and the Euro) said that the EU should retaliate to US measures in a “proportional manner”, consistent with previous remarks.
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JPY: Fading USD/JPY Adds to Bullish JPY Impetus
Feb-17 12:34
USD/JPY fade picking here slightly into (what would be) the US open - USD/JPY edges to a new pullback low at 151.42, marking a break through 151.65 and the overnight lows. Weakness here looks contained until any test or break through more notable support at 150.93 - the YTD low posted just over a week ago.
- Perhaps unsurprisingly volumes are lighter than average so far Monday with the US holidays, however activity is holding up pretty well: CME JPY futures show activity running ~15% below what you'd expect to see at this point in the session.
- As mentioned above, conviction over shorting EUR/JPY is building among the sell-side, and coincides with the failure of the cross to break technical resistance at the 50-day EMA in recent sessions - and should USD/JPY take out the bear trigger at 150.93, that makes two notable technical indicators pointing to JPY strength.
OPTIONS: Larger FX Option Pipeline
Feb-17 12:30
- EUR/USD: Feb18 $1.0300(E1.7bln), $1.0440-50(E1.3bln); Feb19 $1.0500(E1.5bln); Feb20 $1.0520-25(E1.5bln)
- USD/JPY: Feb19 Y155.00-20($1.7bln); Feb20 Y154.00($3.0bln)
- NZD/USD: Feb19 $0.5450(N$1.7bln)
- USD/CAD: Feb18 C$1.4295-00($1.5bln)
- USD/CNY: Feb20 Cny7.2000($1.9bln), Cny7.2500($1.4bln), Cny7.3700($1.3bln)
SONIA: 3.5k More Of the SFIM5 95.6 Put
Feb-17 12:20
SFIM5 95.60 put, bought for 2 in 3.5k.
- Now 7.5k total for the session.
