Wild Ride Continues, RBNZ, AUD Jobs Next
The smoke signals surrounding a Greek deal are getting thicker but the continued bond selloff and exceptional volatility remain the top stories. The yen roared in Asian trading after a quip from Kuroda while the US dollar and Swiss franc lagged on risk appetite. The RBNZ decision and Australian jobs are due later. Each of the Premium longs in EURUSD and GBPUSD are +210 pips, while the EURCAD long is +50 pips and all in progress.
Markets played a game of Deal or No Deal on Greece. The signs are increasingly positive as Dijsselbloem said only a few issues remain to be solved. Bloomberg had a story about Greece offering one concession 'up front' in return for aid while AFP suggested the bailout would extend to March 2016.
At some point, euro traders just throw their hands up with Greece and wait for the smoke to clear. The pair was in a wicked chop Wednesday, making several round trips in the 1.1260 to 1.1350 range before finishing near the top.
Cable, for the third day, was bashed by wild swings, including a 70 pip drop when Carney didn't deliver a hawkish speech. He focused on regulation instead and cable sagged but – yet again – there were buyers waiting in the weeds and it finishes close to the highs.
USD/CAD fell for the fourth day, touching 1.2205 as oil prices climbed.
The RBNZ decision could send shockwaves through the kiwi and then it's onto the Australian jobs report at 0130 GMT. The consensus is for 15K new jobs in May after a 2.9K decline in April. Amidst all the volatility in US trading Wednesday, the Aussie and kiwi were relatively quiet but that will quickly change.
In the bigger picture, we continued to focus on Bund yields as they rose to 1.06% to the highest since Wednesday. But there were signs of exhaustion (or ECB buying) as they tailed back to 0.98% by the end of the day.
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