The next installment of the tariff saga has landed with 25% on the autos sector, this sounds like it will be on top of everything else that has been announced and will be announced come next week but the market seems pretty gun shy in reacting given post inauguration PnL destruction while trying to grapple with what was expected and whether or not the hype of rebalancing will pay off over the next few sessions. Our franchise saw a large amount of USD buying yesterday by RM, corps (and to some extent DHFs) I have to wonder whether flows that needed to be done might have materialized earlier leaving the USD vulnerable I the coming sessions ahead - we have value date month end today and it will be a good litmus test to see if the USD can make further ground this afternoon. Conviction remains low.
For GBP it was a painful watch to see Reeves wear the increasingly optimistic growth trajectory from the OBR - which as Allan rightly points out continues to test the limits of its forecasting credibility - as a badge of honour but that is politics. I would be amazed if we do not see this show play out again in Autumn, and then in Spring and so on given the limited room for manoeuvre and the incredible optimism of future UK growth and productivity. There may not be a smoking gun here for sterling especially given the recent PMIs but I struggle to see GBP in a positive light. Sticking with cross longs still here, we bounced quite aggressively from the lows (1.20 in GBPEUR) but are back to test them this morning, we had a significant bout of RM selling yesterday (4z) which firmly puts GBP as the most sold currency of the sector over the past week. We have the UK Q4 GDP data dump tomorrow alongside retail sales, cable remains ever so muted in its 3 week 1.2850/1.3050 range.
For GBP it was a painful watch to see Reeves wear the increasingly optimistic growth trajectory from the OBR - which as Allan rightly points out continues to test the limits of its forecasting credibility - as a badge of honour but that is politics. I would be amazed if we do not see this show play out again in Autumn, and then in Spring and so on given the limited room for manoeuvre and the incredible optimism of future UK growth and productivity. There may not be a smoking gun here for sterling especially given the recent PMIs but I struggle to see GBP in a positive light. Sticking with cross longs still here, we bounced quite aggressively from the lows (1.20 in GBPEUR) but are back to test them this morning, we had a significant bout of RM selling yesterday (4z) which firmly puts GBP as the most sold currency of the sector over the past week. We have the UK Q4 GDP data dump tomorrow alongside retail sales, cable remains ever so muted in its 3 week 1.2850/1.3050 range.
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1. AccuTrade System:
tradingview.com/v/yDFPnb1J/
2. Signal Performance:
thedailyfx.com/performance/
3. We provide Free TradingView Premium and Essential Membership.
tradingview.com/v/yDFPnb1J/
2. Signal Performance:
thedailyfx.com/performance/
3. We provide Free TradingView Premium and Essential Membership.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.