While USD faced sell pressure all day long GBP was at play, ranged with Euro and GBP/USD reached above 1.1500 keeping eye on 1.1638, Oct 26 swing high. We can’t mark no real news, but 2Yr gilts surged 3.23% or 16bp and BoE bond sale (QT) remained on some focus that may impacted gilt yields. While the whole day investors gossip of USD fall, GBP remained pack leader as we see solid rises in GBP vs other cross currencies as GBPCAD gained 1.5%.
EURUSD above parity
While bund spread of Italian BTP/German narrowed again and EU gas price declined further 4.5%, EURUSD has regained parity. Above parity overall clients remained short in EURUSD and overall 55% open positions remained short in this pair. One can observe USD smile theory and access the other side that defines exceptionalism story of the U.S. remained questioned, more from corporate sides, specially various multinationals announced lay-off, alongside Apple cuts iPhone output 3 million. Global growth still supporting USD ‘smile’ theory, but China reopening undoubtedly would alter the dynamic as in Mar playing out after ‘Two Sessions’.
There’s a clear rejection in Spot Crude from friday high as it found sellers. Support remained near $88.47 and the previous resistance in near $93.83.
US midterm remains in focus although may we won’t get any result before the week ends. Elon Musk publicly ask his followers to support GOP in Congress. The result of the election will define which party will ascertain the U.S. congress.
