FOREX: USD Follows Tech Names Lower, with NVidia Plumbing a New Pullback Low
Greenback fades further following the first hour of US equity trade, and the correlation with stocks and, in particular, US tech remains clear - as noted just above, Nvidia share price is extending the recent DeepSeek inspired slide, lower by over 5.5% on the day and undermining the greenback in the process.
- EUR/USD is comfortably back above the 1.0400 handle to trade back to unchanged, while USD/JPY is testing another daily low having printed 154.95.
- In terms of newsflow, marginal support from the Reuters report on DeepSeek's inaccuracy has certainly faded, with markets likely gearing for the Fed decision and press conference and considering mixed month-end flow into today's WMR fix window. Worth recalling today marks month-end value date.
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US STOCKS: Paring Gains Post-Dallas Fed MFG Expansion
- Treasury futures are scaling off recent session highs after the latest Dallas Fed mfg index data expands faster than expected.
- Tsy Mar'25 10Y futures trade 108-29 last (+15) vs. 109-00.5 high. Little change in mixed curves: 2s10s -.453 at 28.839, 5s30s +2.680 at 38.087.
- Stocks, on the other hand, pare losses: SPX Eminis 5939.0 last vs. 5918.25 low, still weighed by Consumer Discretionary, Materials and Industrials sector shares.
OPTIONS: Expiries for Dec31 NY cut 1000ET (Source DTCC)
EUR/USD: $1.0525(E525mln)
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Larger FX Option Pipeline
EUR/USD: Jan02 $1.0400(E1.5bln), $1.0500(E1.2bln)
USD/JPY: Jan02 Y154.30($2.1bln)
AUD/USD: Jan02 $0.6400-20(A$1.1bln)
USD/CAD: Jan02 C$1.3905($1.2bln); Jan03 C$1.4220($1.5bln)
USD/CNY: Jan02 Cny7.0800($1.7bln)
GILT AUCTION PREVIEW: On offer next week
The DMO has additionally announced it will be looking to sell GBP2.25bln of the 4.375% Jul-54 Gilt (ISIN: GB00BPSNBB36) at its auction next Tuesday, January 7.
