You know the drill folks, at least if you’ve been reading this piece the last few days, there simply isn’t much happening. Overnight saw the biggest moves in USDJPY, which interestingly have all but been given back again this morning. Mainly fuelled by chatter of sales tax hikes, and corporate tax reductions, the Nikkei was up while the Yen weakened. Today sees a large (1 yard) 99.00 USDJPY option expiry which will likely prove to be quite magnetic as far as price action is concerned. And interestingly a similar sized expiry at 1.3500 in EURUSD is also due to roll off this afternoon into the NY cut.
The UK data was softer than expected and for the first time in a few months Cable traders simply didn’t know what to do with themselves as a result. Needless to say the Sterling slipped, but not as far as can be deemed substantial. Continued chatter of the annual European Farmers subsidy payment that will need to be made on the last day o this month keeps the EURGBP cross well offered and thus far finds dip buyers in the Cable. The amount spoken of is around the 5 yard mark and truthfully given how much has been said about it already, I would dare wager that the vast bulk of the transaction has already been done, despite final price fixing and physical transaction not occurring until next week.
Data this afternoon sees US weekly claims as well as final GDP prints. All manner of FED speakers will also be heard tying up the airwaves and causing various forms of disruption. Given that we’ll be hearing from both sides of the rate fence (hawkish and dovish), mixed signals are likely the only outcome.
With month end on our doorstep and a market which remains stagnant and bewildered, your best bet is to go scalping. If you’re looking for value and a decent move though… Patience?
Helmets on and good luck out there.