FOREX: USDJPY Continues to Outperform, Extends Bounce to 1.8%
Mar-12 13:40
- A dip lower for USDJPY post data has reversed as details within the CPI report might not be as benign as originally thought. USDJPY subsequently rose to fresh session highs of 149.19, briefly extending the bounce from yesterday’s lows to 1.8%.
- Major US equity indices are holding on to strong gains on the session, helping to consolidate the relative JPY underperformance on Wednesday. Additionally, cross/JPY has been well bid on the back of the GPIF portfolio headlines during Tuesday’s session, which countered building expectations for an increase in the stock investment ratio, and is considered a headwind for the Yen at the margin.
- Overnight, JP Morgan expect JPY-selling from the financial account to mitigate upwards pressure on the Yen into 2H25. Taking these flow dynamics into account, JPM currently maintains their USDJPY target as of 4Q25 at 148.00.
- Technically, a bear cycle remains in play for USDJPY, and the latest recovery appears corrective. Key short-term resistance is unchanged at 151.30, Mar 3 high.
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GLOBAL POLITICAL RISK: Week Ahead 10-16 February
Feb-10 13:30
MNI's Political Risk team has published its Week Ahead article, looking at the major political risk events scheduled for the coming seven days.
Monday 10 February:
- China-US: Following US President Donald Trump’s imposition of 10% tariffs on almost all Chinese products entering the US, Beijing has responded with its own measures as of 10 February. A 15% levy on imports of US coal and LNG, and a 10% tariff on US oil, agricultural machinery and large-engine cars have come into force. With both the US and China having now imposed some form of trade levy on the other, focus will be on whether there is an escalation into an all-out trade war or if this now sets up Washington and Beijing for negotiations.
Full article PDF attached below:
PIPELINE: Corporate Bond Issuance Roundup: Eli Lilly 6Pt on Tap
Feb-10 13:25
- Date $MM Issuer (Priced *, Launch #)
- 02/10 $Benchmark Eli Lilly 3Y +50a, 5Y +65a, 7Y +75a, 10Y +85a, 30Y +105a, 40Y +115a
- 02/10 $Benchmark Textron 10Y +125a
- 02/10 $700M Snap Inc 8NC3 7%a
- For comparison: Eli Lilly issued $5B over 5 tranches last August 8: $750M 3Y +35, $1B 5Y +50, $1.25B 10Y +70, $1.25B 30Y +88, $750M 40Y +100
US TSYS: J.P.Morgan Recommend 20s/30s Flatteners
Feb-10 13:22
J.P.Morgan note that “yields are unchanged to lower in ’25 and in the middle of the ranges they have held since the November election.”
- They go on to suggest that “given the good news on term premium, the coming weeks could open the debate on the asymmetric nature of the Fed’s reaction function. Thus, we look for cheap ways to position for higher yields within the current ranges.”
- They think “the 20-year sector looks rich along the curve”, recommending 20s/30s flatteners as a “low-beta bearish trade within the current range, with a relative value overlay.”
