What we trade today
Our three strongest calls: what changed, and why we trade it.
The oil shock lifts real rates and the dollar with them
The United States pays more to hold its money than Japan does. Price is following that gap rather than leading it.
- 1What changedCrude jumped on a supply scare
- 2Why that moves USD/JPYThat pays dollar holders more
Europe buys what it burns, and it just got dearer
An energy importer meets a currency bid for its real rates.
- 1What changedThe energy bill reprices
- 2Why that moves EUR/USDA terms-of-trade shock is a currency shock
The franc is where nervous money goes
Switzerland is a safe place to park money.
- 1What changedRisk appetite turned
- 2Why that moves GBP/CHFA haven bid is a funding bid
The ten currencies
Each currency in its board rank, with our read on it in a sentence or two.
USDUS dollarBoard rank 1 of 10 on its own numbers↑ BullishRank 12Y —2Y yield —Real-rate tailwind from the oil-driven yield move.
CHFSwiss francBoard rank 2 of 10 on its own numbers↑ BullishRank 22Y —2Y yield —Haven bid.
GBPBritish poundBoard rank 3 of 10 on its own numbers↔ NeutralRank 32Y —2Y yield —Balanced.
CADCanadian dollarBoard rank 4 of 10 on its own numbers↑ BullishRank 42Y —2Y yield —Oil exporter.
EUREuroBoard rank 5 of 10 on its own numbers↓ BearishRank 52Y —2Y yield —Energy importer drag.
AUDAustralian dollarBoard rank 6 of 10 on its own numbers↔ NeutralRank 62Y —2Y yield —China cross-currents.
NZDNew Zealand dollarBoard rank 7 of 10 on its own numbers↓ BearishRank 72Y —2Y yield —Dovish RBNZ.
SEKSwedish kronaBoard rank 8 of 10 on its own numbers↓ BearishRank 82Y —2Y yield —Beta to Europe.
NOKNorwegian kroneBoard rank 9 of 10 on its own numbers↔ MixedRank 92Y —2Y yield —Oil vs risk tug.
JPYJapanese yenBoard rank 10 of 10 on its own numbers↓ BearishRank 102Y —2Y yield —Funding leg as real-rate gaps widen.
What changed
What came out, what made the news and what moved in our calls since the last update.
Releases
What came out against what was expected, and what each meant for its currency.
Nonfarm PayrollsThu 9 Jul · 12:30Expected 15KActual 76.3K ↑, bullish for USDIt keeps rates high for longer than traders assumed.
German industrial outputThu 9 Jul · 06:00Expected 0.2%Actual -0.8% ↓, bearish for EURIt makes a European rate rise harder to argue for.
Headlines
The stories that touch our calls, and the currencies they lift or weigh on.
CADChanges to our strongest calls
Pairs that joined or dropped out of the handful of calls we back most strongly. Dropping out does not close the call.
- 10 Jul
AUD/JPYJoined our strongest callsBefore: Not among our strongest—After: Among our strongest↑BuyMedium-highAustralia's rate path has firmed while Japan's has not.
- 10 Jul
NZD/USDDropped out of our strongest calls · still a callBefore: Among our strongest↓SellMediumAfter: Dropped out, still a call↓SellNothing about the pair changed; two other expressions of the same dollar view overtook it on the strength of their own evidence.
- 10 Jul
EUR/GBPDropped out of our strongest calls · call changedBefore: Among our strongest↑BuyMediumAfter: Dropped out, call changed↓SellBritain's inflation print landed above forecast and took the case for the euro side of this pair with it.
- 10 Jul
USD/CHFDropped out of our strongest calls · no call leftBefore: Among our strongest↑BuyLowAfter: Dropped out, no call—The evidence on both sides cancelled out, and we would rather hold no view than a thin one.
- 8 JulGBP/JPYDropped out of our strongest calls · standing not knownBefore: Among our strongest↓SellHighAfter: Dropped outNot known
Japan's policy meeting is close enough that the range around this pair is wider than the move we were reaching for.
- 9 JulAUD/NZDDropped out of our strongest calls · call changedBefore: Among our strongest↑BuyMediumAfter: Dropped out, call changed↔Range
Both central banks moved the same way on the same day, and what was a gap between them is now a range we would rather trade the edges of than take a side in.
Coming up
The high-impact releases of the next days, and what each could do to our calls.
