Forex - EUR/USD, GBP/USD Flows: USD gives some back after IP data ... Cable still looks heavy though


 14:48 (GMT) 15 Feb

  [Forex Flows]

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EUR/USD, GBP/USD Flows: USD gives some back after IP data ... Cable still looks heavy though (0100-LMBF-C01)

Industrial production took a little of the gloss of the preceding US data releases (though is quite positive in the underlying detail) and it doesn't look as though EUR/USD is on the fast track to test 1.0500 in its wake. Once again, however, it's Cable promising the better returns as the modest bounce holds well short of 1.2430/35 and keeps 1.2345 support in view as the next downside level to watch for. If EUR/USD closes back over 1.0550/55 it will again ask some difficult questions of long term shorts' commitment to a run to at least the January low at 1.0340, the debate over whether we see a run at parity up for debate after that. PB


Forex - USD/JPY, EUR/JPY Flows: Governor Haruhiko Kuroda said the Bank of Japan could lower its target rates if more easing was needed


 06:09 (GMT) 15 Feb

 [Forex Flows]

Governor Haruhiko Kuroda said the Bank of Japan could lower its target rates if more easing was needed to deal with a deterioration of the economy at home and abroad. BoJ Kuroda was answering questions from lawmakers in parliament. BOJ easing is aimed at achieving price stability, not fx market. The most important characteristic for any central bank governor is the ability to take the most appropriate policy in accordance with changes in the economy. No plan to raise target interest rates as the BOJ is far from its 2% inflation target.

USDJPY still capped by machine offers at 114.50. though the entry of Europe should see prices attempt higher again. Part of the reason for the buoyancy was due to short covering of AUDJPY at levels above 87.50. The cross has quietly printed a 13 month high of 87.79 on the day and the smart money is on a break of 88.00 before the day is over. Some hesitation, however, is likely to be seen at next resistance at 88.20.


Forex - EUR/USD, USD/JPY Flows: Japan's SoftBank Group Corp has agreed to buy Fortress Investment Group LLC for about $3.3 billion in cash


 02:33 (GMT) 15 Feb

 [Forex Flows]

Reuters: Japan's SoftBank Group Corp has agreed to buy Fortress Investment Group LLC, a private-equity firm and asset manager, for about $3.3 billion in cash - a surprise move for a group that has to date focused on telecoms and technology. Led by charismatic founder Masayashi Son, SoftBank has made unpredictable moves in the past, not least its decision last October to set up a $100 billion technology investment fund with Saudi Arabia. A New York-listed asset manager, Fortress's investments span real estate, hedge funds and private equity. It had $70 billion in investments under management at the end of September 2016.

EURUSD might have traded below 1.0590, but stiff support was found at slightly lower levels of 1.0560, despite several attempts below. Another test appears to be in the offing, though we doubt that the Asia traders have the necessary will and means to bring prices lower. A firm break to sub 1.0550 levels would likely only be seen on the entry of Europe. Thicker bids are seen at 1.0500 = 10 levels.


Forex - EUR/USD, USD/JPY Flows: Yellen says rates will go up ... but we know that


 15:25 (GMT) 14 Feb

 [Forex Flows]

The market got very excited when Fed Chair Yellen said that we are likely to see a hike over the next few FOMC meetings, but we knew that already (didn't we) and in this writer's view we are no further forward on timing than we were. She does say that upcoming inflation and employment data will be closely watched and that rather neatly leads us into tomorrow's CPI numbers where but a strong bounce would mean the risk of core PCE prices reaching 2.0% earlier than expected. In the meantime if we don't see EUR/USD close below 1.0590 (and preferably below 1.0555) we will reserve judgement on the prospects of further near-term USD gains. PB