EURUSD Tops 1.13, USDJPY at Resistance, Crude Oil Gains- US Market Open

2019-04-12 12:00:00

MARKET DEVELOPMENT – EURUSD Tops 1.13, USDJPY at Resistance, Crude Oil Gains

EUR: The Euro is notably firmer this morning vs. USD & JPY with EURUSD back above 1.13. The initial rise in the Euro had stemmed from large orders at the Tokyo Fix observed in EURJPY (EUR 3bln from 125.70-126.29) on touted M&A proceed from Mitsubishi UFJ’s purchase of a unit from Germany’s DZ Bank. Elsewhere, the Euro received a further bid in the European morning after Chinese data surprised to the upside, and most notably the credit splurge in March, whereby aggregate soared by CNY 2.8tln (Exp. CNY 1.8tln). This had also followed the large trade surplus that China had posted in March, increasing the sense that a China rebound could be on the horizon in Q2. As we had highlighted in our currency volatility report, risk reversals had flipped to positive on both the 1D and 1W for EURUSD, consequently implying that the Euro may have bottomed out in the near-term.

JPY: The Japanese Yen is the notable underperformer in the G10 space, failing to recover from Tokyo Fix related flows overnight, while green shoots stemming from Chinese data had also sapped demand from the safe haven JPY. 112.00 resistance holding for now, however, a closing break raises scope for test of 112.50.

Crude Oil: Oil prices delivered further gains this morning, recovering from the mild losses seen yesterday as positive Chinese data boosts risk appetite. On the geopolitical front, little has changed in the past 24 hours, however, the fact remains the same, which is that the current tensions emanating from Libya, continue to provide an undertone of support. Oil bulls eye a move towards $72.50.