Good morning for sterling, cable up at 1.5345 from early 1.5225, while EUR/GBP is down at .8985 from early .9057.  The trigger for the sterling gains was the better than expected jobs report.  Cable buying by a US investment bank in the 1.5210/15 area contained early weakness.  The BIS came in buying in 1.5220/25 area minutes before the release of the jobs data. How opportune. 

After the release it was basically a moonshot all the way to 1.5380 as sterling shorts were horribly squeezed, before we settled back slightly.

EUR/USD started round 1.3785 which is basically where we sit at writing.  It didn’t take long for the euro bulls to take out barrier option interest touted up at 1.3800 and we got to session high 1.3817 before slipping back.   More sovereign sell orders tipped at 1.3825/50 with further barrier option interest said to lie at 1.3850.   

The pairing did come under some pressure mid morning, reaching session low 1.3761, weighed down by heavy EUR/GBP selling in wake of UK jobs report.  Merkel’s comments probably played a little part there as well.   BIS was seen buying in low 1.3780’s.

USD/JPY at 90.50, unchanged on day.  Reports Japan Post Bank has been buying the pairing today, probably tied to purchases of US treasuries.  We remain stuck in well-defined 90-91 range at the present time.

• Recovery is multi-speed
• For many countries it is too early to begin exit strategies
• Better balance of global demand needed
• China and Germany should boost domestic demand
• Appreciation of yuan would help in global rebalancing
• Massive build up of reserves is is burden for financial system
• Global risks uncoordinated policies, distorted capital flows
• Quick deal needed in EU on financial regulation

The rebound in the Chinese economy and continued large accumulation of forex reserves shows China should resume CNY appreciation. China should move to a more market-oriented exchange rate, the official says.

EUR/USD is losing ground ahead of the Fed, in no small part on the uptick in trade tensions. Risk aversion is a theme that will likely accompany trade disputes.  EUR/USD trades at 1.3730.

In lousy economic times, trade tensions become magnified, as we have seen…If these trade spats flare up further, look for risk aversion to be a theme ahead.

Careful, lads. The Chinese don’t like to be bullied…You get more flies with honey than vinegar, the old saying goes…

• Treasury would be required to identify countries with fundamentally misaligned currencies
• Report to Congress twice per year on misaligned currencies
• Country gets 90 days to take steps to begin correcting currency misalignment
• anti-dumping duties if steps not taken
• 360 days to correct misalignment before case brought before WTO.

Well looks from all the rhetoric as though Greece is going to get its aid, if infact it needs it.  Can’t really fathom the details. Maybe its just me being slow. or maybe there aren’t any.

EUR/USD up at 1.3720 from early 1.3695. Early sell-off reached session low 1.3657 where sovereign purchases supported.  Slightly better than expected ZEW data (see above) also helped.   

Cable started around 1.5005 and fell to 1.4979, two  UK clearers and a German bank notable sellers.  Sovereign buy orders were tipped down at 1.4950/60 but we didn’t get that far. Sovereign buying is said to have surfaced around the lows.  Stops were tripped as we went through overnight high of 1.5071 on way to session high 1.5153, presently at 1.5140.  Another clearer (neither of those seen selling earlier) is said to have played a big part in getting the pairing through 1.5100.

Latest poll in Daily express shows Tories lead increasing. Maybe we might not get hung parliament after all.  Fingers crossed.

EUR/GBP down at .9062 from early .9095.  An early rally floundered at .9119.  The .9110/30 zone continues to provide formidable resistance.

USD/JPY up at 90.65 from early 90.10.  We’re stuck 90.00-91.00 range at the moment.  Fiscal year end repatriation flows capping the upside. Speculation BOJ will bring in further easing measures this week limiting downside.

Oh yeah, the relationship is terrific, why do you ask?

Sounds like one of those Washington tickle fights…

Trade wars are a bad, bad thing…Over the medium-term, it suggests shades of the Great Depression. This growing spat certainly argues for risk aversion…

Bad morning for sterling, cable down at 1.5045 from early 1.5160, while EUR/GBP is up at .9118 from early .9060.  The move comes with worries over a hung parliament exacerabated by weekend polls; warning from Moody’s re Uk’s AAA rating; downbeat comments from BOE’s Barker; and poor UK housing data from Rightmove,  the +0.1% m/m rise in March being the lowest recorded for the month.

Cable, and sterling in general, started out on the front foot however, cable fleetingly above 1.5200, EUR/GBP down to .9047.  Given the raft of poor news the move was a little baffling and sources cited decent cable buying from Eastern Europe.  Some also seemed to take solace in the Moody’s comments, but I couldn’t quite see that myself.

Talk UK clearer was an aggressive cable seller during the session, mutterings it was tied to Prudential’s purchase of AIA.

EUR/USD little easier, but not by much.  EUR/USD sits at 1.3724 having been as low as 1.3699 after stops tripped through 1.3720.  Comments from German spokesman and others re Greek aid have been duly noted (see above).  Talk of sovereign sell interest up at 1.3800 and again up at 1.3830/50 will be adding note of caution to euro bulls.

USD/JPY very marginally firmer, up at 90.70 from early 90.57.  The pairing remains fairly well underpinned ahead of  BOJ’s meeting later in the week.  Sell orders seen 90.80/00, stops just above there.

EUR/CHF has continued lower, presently down at 1.4533 from early 1.4560 as the SNB stays at home.

EUR/USD down at 1.3713, having been as low as 1.3706 after stops through 1.3720 were tripped.

That doesn’t look like it will stop Chuck Schumer from rattling the Asian Tigers cage.

The US has been reluctant in the past to confront China too aggressively on the matter, seeing it as counter productive. That reluctance is breaking down however, with unemployment sky-high and the recovery unfolding at a very modest pace.

China does not like to be told what to do, and the market may fear retaliation, verbal at first, and possibly actual sales of US assets. Should be interesting days ahead, or it could just be a an empty threat from Schumer. He has made the same threat before. We shall see.

The USD has seen some across the board slippage. Some have cited reports Janet Yellen is Obama’s pick for Fed  vice chairperson as one of the reasons for this bout of weakness. She is a noted monetary dove. In her most recent speech she said the economy will operate below potential this year and next and still needs low interest rates saying “This is not the time to be tightening.” Oh well it’s a reason of sorts I guess.

EUR/USD presently at 1.3765 having started out around 1.3695 and has been as high as 1.3796.   Asian sovereign buying seen early.  We got to around 1.3725/30 where Russia was a notable seller stalling the rally. But not for long.  We were soon through touted sell orders at 1.3730/50, tripping stops just above and making it to just shy of 1.3800 where sovereign sell orders had been cited earlier in the day.

Traders were quick to note a US investment bank putting out a long EUR/USD recommendaton, target 1.4500, stop 1.3500.  The release of demonstrably stronger than expected euro zone industrial output data certainly helped provide underpinning.

Cable up at 1.5155 from early 1.5065, but slightly off session high 1.5172.  Asian sovereign seen buying early.  Market noted the Angus Reid poll showing Tories extending poll lead out to 13 points.  The pairing did swoon when comments from BOE’s Dale hit the wires, the MPC member opining that the QE pause doesn’t mean it has come to an end. We went quickly from around 1.5155 to 1.5135 before recovering just as quickly.

USD/JPY down at 90.45 from early 90.60 having been as low as 90.18 at one stage.

EUR/CHF down on the day. Started around 1.4618 and fell quickly.  It made it all the way to 1.4581 with a Swiss commercial bank a notable seller managing to run through reported  SNB bids in the 1.4590/95 area.  We’re presently at 4588.

USD/CAD sharply lower, down at  session low 1.0157 from early 1.0235, with decent stops tripped on move through 1.0200.  Move coincided with release of latest Canadian jobs data.

Oh, and there’s going to be a task force!

All that is well and good, but the question is what will he do level the playing field? His administration has shown willingness to pursue mildly protectionist tendencies. A move toward greater protectionism is a major risk going forward, especially if  China retaliates via the financial markets.

US equities are rebounding, now down 0.2% i the day, helping give “risk” trades a lift. EUR/USD has bounded 30 pips to the low 1.3660s.

The UK is said to be ready to relent on the new rules after opposing them earlier.

Euro has had an Ok morning after shaky start.  EUR/USD  is up at 1.3620 from an early 1.3595, receiving a late morning boost from news that Greece has told EU implementation of deficit plan is ahead of schedule.  EUR/JPY is up at 123.10 from early 122.40, while EUR/GBP is up at .9120 from early .9085.

It wasn’t all a bed of roses though.  EUR/USD initially came under pretty heavy pressure, the euro underminned by demonstrably weaker than expected German trade data (see above.) We got as low as 1.3546 before recovery, a major French bank having apparently backed up the truck and bought aggressively around the lows.  I’m sure they’ll be reports of sovereign buying down around lows but didn’t  hear them myself.

Cable started around 1.4965 and came under heavy pressure right from the get go.  Reports had a UK clearer and hedge funds selling aggressively. The clearer was said to have been the same one seen buying 6 month 1.4400 cable puts recently.

We got below 1.4900 buy strong buying emerged just ahead of technical support at 1.4880 (76.4% retracement of 1.4781/1.5197).  This lifted cable higher and reports of sovereign purchases helped cable get back to around 1.4950 just ahead of the 09:30 GMT release of truly horrible UK industrial/manufacturing output data. Cable swooned and eventually got as low as 1.4874. We’ve seen some recovery, presently back up at 1.4920.

Reports SNB intervened in EUR/CHF lifted the cross from 1.4612 session low. But there has been no followthrough (session high 1.4630) and we’re presently at 1.4620, effectively unchanged on the day.

USD/JPY sits up at 90.40 from early 90.05 amid speculation BOJ could ease monetary policy further at their March 16/17 meeting.  Stops tipped through 90.65.