| |
|
Citizens Foreign Exchange: Your Foreign FiX for Thursday, January 17 |
| |
|
|
| |
| Trading Desk Direct: 888.821.3600 |
| |
|
| |
Your Foreign FiX
Thursday, January 17, 2019 |
| |
| U.S. equities and interest rates are trading lower this morning, stemming the positive momentum since the start of the year, perhaps due to the growing concerns over the partial government shutdown, now entering the 27th day. Speaker of the House, Pelosi has called for the President to delay the State of the Union address until there is a resolution to the shutdown. Thus far the White House has not responded and the speech remains scheduled for January 29. There is a growing concern that the shutdown will subtract from Q1 economic growth. The market appears to be acknowledging this, now pricing the probability for a Fed March hike at zero. All of these concerns have been weighing on the dollar. The Bloomberg dollar index is trading at 1,187, up marginally from yesterday but down 76 bps from the start of the year. Recently weaker European economic data and Brexit concerns have supported the dollar this week. The just released Philadelphia Fed business outlook jumped up to 17, much better than the 9.5 expected. Market bulls will take a breath after seeing several regional economic surveys miss expectations. | |
Canada: The Canadian Dollar weakened by 45 bps this morning as Crude oil continues to slip. WTI Crude retraces some of yesterday's gains to weaken by 2% this morning and trade near the low end of $51. In the past week, the Canadian Dollar has steadily weakened against USD after the currency originally recovered 3.5% of its value in early January. USDCAD remains bound by its 50 and 100 DMA levels as immediate resistance and support, respectively. Market participants will look forward to December inflation data tomorrow to provide further momentum to close the week, while Canadian retail sales are on the agenda for next Wednesday. In geopolitical news, the Canadian ambassador to China said that the diplomatic feud caused by the arrest of Huawei CFO is “damaging Beijing’s reputation”. USDCAD continues to find near-term support at the 100-day moving average level of 1.3196 as commodity prices continue to remain volatile.
| |
| China: The offshore Chinese Yuan weakened by 25 bps overnight, trading up to 6.779 as the US comes in on Thursday morning. The local central bank injected 560B Yuan, a new record one day amount of liquidity via 7 day reverse report contracts. Based on updated macro projections and banking liquidity measures the PBOC may lower the reserve requirement ratio again as soon as April. News US federal authorities are investigating Huawei for stealing trade secrets will undoubtedly complicate trade negotiations between the US and China at their upcoming meeting in Washington at the end of the month. One month implied volatility rose another 3 bps overnight to touch 5.32% a new January 2019 high. | |
Europe: After Tuesday’s drop, EUR/USD has consolidated at 1.1400, and is holding its 60bps loss for the week. The market saw aggregate inflation data from the Eurozone this morning, and headline numbers slowed from 1.9% to 1.6% YoY. While this result was highly anticipated, it contributes yet another soft data series for the ECB to consider ahead of next week’s central bank meeting. Investors will likely be forced to view everything on a relative basis going forward, and that said, it’s just a matter of which economy decelerates faster to determine the correct valuation for EUR/USD. Let the race to the bottom begin, and in the meantime, further consolidation for the pair within its range. Look for price action to be defined by 1.1310 and 1.1420.
|
|
|
 |
|
| |
Percentage Change |
| |
1M |
3M |
6M |
9M |
12M |
24M |
USDCAD |
-0.90% |
2.04% |
0.72% |
4.07% |
6.82% |
1.86% |
USDCNH |
-1.76% |
-2.17% |
0.86% |
7.11% |
5.40% |
-0.33% |
EURUSD |
0.49% |
-0.84% |
-2.20% |
-4.29% |
-6.42% |
6.45% |
|
| |
Annualized Forward Differential |
| |
1M |
3M |
6M |
9M |
12M |
24M |
USDCAD |
0.83% |
0.83% |
0.79% |
0.75% |
0.73% |
0.58% |
USDCNH |
0.15% |
0.18% |
0.16% |
0.16% |
0.17% |
0.26% |
EURUSD |
3.17% |
3.12% |
3.08% |
3.08% |
3.10% |
2.94% |
|
| |
Implied Volatilty |
| |
3M |
6M |
9M |
12M |
24M |
6M-RR |
USDCAD |
6.73% |
7.04% |
7.20% |
7.34% |
7.68% |
0.66% |
USDCNH |
5.79% |
6.00% |
6.12% |
6.18% |
6.45% |
0.92% |
EURUSD |
6.84% |
7.05% |
7.25% |
7.35% |
7.79% |
-0.53% |
|
|
| USDCAD finds near-term support at 100-day moving average |  | | USDCAD continuing to react to fluctuations in Oil prices | | | EUR/USD Again Sideways |  | | Despite soft data, EUR/USD stays its course (or lack thereof...) |
|
| Read our technical documentation to learn more about this data. |
|
|
|
| Questions, or thinking of trading? Contact the Foreign Exchange Trading Desk direct at 888.821.3600. |
|
|
|
|
| Get just the daily FiX information you want – set your preferences |
|
 |
Subscribe
to the Citizens Daily Foreign FiX email. |
|
|
|
Send us an email with a comment or question about the Citizens Daily FiX email. |
|
|
|
|
|
|
|
|
This document has been prepared for discussion and informational purposes only by Citizens Bank, N.A.
(Citizens). In the preparation of this document, Citizens has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. Citizens makes no representation or warranty (expressed or implied) of any nature, nor does it accept any responsibility or liability of any kind, with respect to the accuracy or completeness of the information in this document. The information in this document is subject to change without notice and Citizens does not undertake a duty or responsibility to update these materials.
Citizens is not acting as an advisor or fiduciary in any respect in connection with providing this information, and no information or material contained herein is to be relied upon for the purpose of making or communicating investment or other decisions nor construed as either projections or predictions. In no event should the information be considered recommendations to enter into transactions. Citizens and its affiliates, connected companies, employees or clients may have an interest in the financial instruments mentioned in this document.
To ensure that you receive our emails, please add mail@citizenscommercial.com to your address book.
Privacy and Security:
Please do not reply to this email. For inquiries kindly call 877.550.5933. Keeping your financial information secure is one of our most important
responsibilities. We will never ask you to send sensitive information via email or via a link in an email. If you receive a suspicious email claiming to
be from Citizens Commercial Banking please forward it to: abuse@citizensbank.com. For
an explanation of how we manage customer information, please read our Privacy Notice.
To opt-out of future promotional emails, please click here.
Citizens Bank | One Citizens Plaza | Providence, RI 02903
©2024 Citizens Financial Group, Inc. All rights reserved. Banking products and services are offered by
Citizens Bank, N.A. Member FDIC. Securities products and services are offered through Citizens Capital
Markets, Inc., Member FINRA, SIPC. Citizens Bank & Citizens Commercial Banking are
brand names of Citizens Bank, N.A. Citizens Capital Markets is a brand name of Citizens Financial Group, Inc.
|
|
 |
 |
 |
