Citi

European Open

Asian weakness seemed to be the theme during the session today, over broader concerns of global recovery as well as some concerns around a trading suspension for Evergrande. Holidays today in AUD, CNY and KRW kept the session relatively quiet as well. USD, JPY, CHF saw slight upticks as a result of the sentiment. Nevertheless, eyes will be firmly placed on the OPEC+ meeting later today. Given the latest rise in oil prices, Citi Commodities Strategy flags that the committee is likely to double production to 800k B/D for November.

Looking ahead, we flag a set of central bank talk, starting with GBP’s Dave Ramsden & Mark Carney (13:00 BST) and USD’s Bullard (17:00 BST). We do not expect any surprises from these speeches. We also note that CHF and TRY will see data in the form of CPI at 07:30 BST and 08:00 BST respectively. COP will see the Colombia Monetary Policy Minutes at 23:00 BST, which will be interesting following the sighting of two hawkish dissenters at the meeting.

USD traded slightly higher with Asia seeing some weakness during the session. CHF and JPY traded flat, and most of the remaining G10 currencies saw slight dips. This seems to be driven by broader views on global recovery, as well as Evergrande’s suspension of trading. HSI and NKY saw dips of around 1.9% and 1% respectively.

JP Morgan

EUR

Plenty of debate around further slowing in growth and sticky inflation and what that means for the dollar, higher global yields and commodity prices are complicating the trading environment also. I would say that people have tentatively chased this recent dollar rally, but there doesn’t feel a huge conviction about it at all, dollar performance has been mixed, and the whipsaw in currency markets at the end of last week demonstrates it won’t be one way traffic. The key for me is still growth here, we continue to downgrade our forecasts and supply concerns in both raw material and labour markets linger, the less transitory these issues are the more it will continue to weigh on sentiment, any signs of improvement and there is plenty of bearishness out there. For now risk wise am still fairly light, prefer to stay a bit flexible here until the bigger picture story becomes a bit more definitive. I remain small bearish usdjpy for now, selling against big resistance levels last week as US yields take a breather, but reality is payrolls data Friday will be important and the main focus, one eye on the US update on China trade situation later today as well. I also remain core short eurczk.

The euro is consolidating below last week’s technical break, caught up in the mixed dollar moves on Friday so stabilised, but whilst below 1.1660 the market will favour the downside. Targets remain fairly uneventful for now, 1.15 initially so really awaiting developments to determine if this is the start of something bigger, real money has yet to really engage on this move as yet.