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Forex - EUR/USD, EUR/JPY Flows: Brussels is starting systematically to shut out British groups from multibillion-euro contract


 05:58 (GMT) 20 Apr

  [Forex Flows]

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EUR/USD, EUR/JPY Flows: Brussels is starting systematically to shut out British groups from multibillion-euro contract (0100-NGPM-C01)

FT: Brussels is starting systematically to shut out British groups from multibillion-euro contracts and urging companies to decamp to one of the 27 remaining EU members as it prepares for Brexit. In an internal memo seen by the Financial Times, top European Commission officials have told staff to avoid "unnecessary additional complications" with Britain before 2019, highlighting an administrative chill that is biting even before Britain leaves the bloc. It explicitly calls on EU staff to begin encouraging the UK-based private sector to prepare for the "legal repercussions" of Brexit and consider the need "to have an office in the EU" to maintain their operating permits. Agencies are also told to prepare to "disconnect" the UK from sensitive databases, potentially on the day of Brexit.

EURUSD still trading strongly above 1.0700, while EURJPY is threatening to break 117.00 again. As we wrote in our previous flow, the chances of a Melenchon/ Le Pen match up has been under priced, in our view, and given that both candidates support Frexit, opening EUR prices next week would find it find a bid should the match up materialise. As such, EURJPY offers near 117.00 and EURUSD offers above 1.0700 actually present a very attractive risk to reward profile, toward the end of the week. However, it would be best to keep stops tight, at >1.0750 in EURUSD and >117.20 in EURJPY


Forex - USD/CAD, WTI Flows: EIA data has little effect on oil, dairy more important for CAD at the moment


 14:41 (GMT) 19 Apr

 [Forex Flows]

EIA oil inventory data just released and crude has a slightly smaller than expected draw of 1 Mn. barrels against 1.4 Mn. Limited action for the oil price as WTI trades 10 cents either side of $52.40. USD/CAD within 10 pips of the day's high in 1.3440s but a dairy dispute between the two neighbours would appear to be the reason behind CAD's recent weakness. IJ.


Forex - EUR/USD Flows: Large 1.0700 EUR/USD option expiry


 13:50 (GMT) 19 Apr

 [Forex Flows]

1.3 Bn. of EUR/USD 1.0700 strike option expiries at the top of the hour and we are currently trading a dozen or so pips above. It would be no great surprise to see the vested interests manage a perfect landing, although that would involve stretching the day's range to 36 pips from 29! Not the most inspiring of days for EUR/USD traders and it would appear that the only chance of action before Europe heads for the door is some fall out from this option expiry. IJ.


Forex - USD/JPY, GBP/JPY Flows: USD/JPY back on the 109 handle


 12:06 (GMT) 19 Apr

 [Forex Flows]

It's a slow old go after yesterday's fireworks but in a sign that USD might be basing out USD/JPY has just popped above 109. Along with the politics related strength behind Sterling, this has put GBP/JPY back on the 140 handle for the first time this month. I would imagine that this price action, along with EUR/GBP's proximity to 0.8333 (1.20 equivalent) will generate some cable supply in the upper 1.28s. IJ.


Forex - EUR/USD, GBP/USD Flows: Hansson on the newswires


 09:39 (GMT) 19 Apr

 [Forex Flows]

ECB's Hansson, a sometime hawk, on the newswires - need more incoming data before considering concrete policy action - considering his previous stances, this could be construed as mildly dovish, although obviously not in any way an attempt to manipulate the currency. EUR/USD doesn't appear very interested, the range for the whole day thus far is less than 30 pips, although the up move, triggered by the Cable spike, would appear to have run out of steam. IJ.


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