Overall, there is little sense in the April Minutes of any meaningful shift in the MPC's policy bias or signalling. Although the Minutes predate the extraordinarily strong rise in (self) employment in last week's data, we remain sceptical that the MPC will be as dazzled by these figures as the markets seemingly are (we do not believe that self-employment is rising at anything like a 14% annualised rate). Still, the fall in the unemployment rate below the 7% threshold opens the…Continue
Reserve Bank of New Zealand will probably raise OCR for a second consecutive month later today, bringing the rate back to 3.0% for the first time since RBNZ cut 50bp in March 2011 in response to the Christchurch earthquake. NZD should be supported into/through that decision. Tactically, long NZD/CHF for this week. But Kiwi is one of the most expensive currencies in the world in REER terms and multi month is likely to be sold - heavily"
"Trading Strategy: We like EUR/USD higher to tax ECB patience. A break of 1.40 looms. Cable can get dragged higher too near term as markets romance the idea that Bank of England can (a) raise rates before the Fed; and (b) subsequently tighten faster than the Fed. Long term GBP fundamentals are poor. We are sellers of NZD versus USD on any rallies to 0.87-0.90. We are sellers of SEK. In EMFX, we still like long USD/CNH for 6.30 then 6.40…Continue
Outlook: Play the range
ST Resistance: 0.8670 (ahead of 0.8740)
ST Support: 0.8500 (ahead of 0.8440)
The currency broke convincingly out of its upward trend at the end of last week. This week, it should be capped by the March 2014 high.…