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Major currencies were all over the place as the lower-yielding franc held on to the top spot while the dollar and yen lagged far behind.

Comdolls were also mixed, with the Kiwi in second place and the other two on the losing end.

  • U.S. pending home sales up 0.9% vs. 0.4% forecast
  • New Zealand building consents sank 7.6% after previous 6.9% rise
  • Japan’s jobless rate rose from 2.2% to 2.4% vs. 2.3% forecast
  • Japanese industrial production down 2.1% vs. expected 0.3% dip
  • Trump mulling $100B tax cut for the wealthy?
  • Trump: “No problem” gov’t shutdown unless border security granted
  • Chinese official PMI readings due next
  • BOJ monetary policy statement coming up

Major Events/Reports:

Stocks down, yields up

After a shaky European stock market performance, Wall Street didn’t fare any better as tech sector losses weighed on indices.

  • Dow 30 index is down 144.23 points to 25,306.83 (-0.57%)
  • Nasdaq is down 107.42 points to 7,630.00 (-1.39%)
  • S&P 500 index is down 16.22 points to 2,802.60 (-0.58%)

U.S. bond yields, however, managed to rake in some gains as investors still anticipate a few hawkish hints in the upcoming FOMC statement.

  • U.S. 5-year yield is up 1.1 basis points to 2.8496%
  • U.S. 10-year yield is up 1.9 basis points to 2.9728%
  • U.S. 30-year yield is up 2.4 basis points to 3.1063%

The Greenback wasn’t able to draw much support from the rise in yields, though, as U.S. President Trump revived threats of a government shutdown.

As it turned out, the Donald is putting the spotlight back on the border wall with Mexico and wants to see security beefed up in the area. In a joint press conference after his meeting with Italian PM Conte, the POTUS declared:

“I would have no problem doing a shutdown. It’s time we had border security.”

Pre-BOJ positioning?

Without much economic data to chew on for the New York session, forex traders turned to the top-tier events lined up for the next few days in adjusting their positions.

In particular, the BOJ decision due in a few hours caught their eye, and remarks from a former Vice Minister of Finance of Japan downplayed tapering hopes.

According to former FX chief Tatsuo Yamasaki, the Japanese yen is in line with fundamentals, so there’d probably be no reason for the central bank to make any changes to policy just yet. He even added that policymakers could decide to downgrade their inflation outlook.

It didn’t help that the latest batch of figures from Japan fell short of estimates, casting more doubt that BOJ head honcho Kuroda and his men could announce something new this week. The unemployment rate ticked a couple of notches higher from 2.2% to 2.4% versus the 2.4% forecast while preliminary industrial production sank by 2.1% versus the projected 0.3% dip.

Major Market Mover(s):

USD & JPY

Expectations for the central bank events that would likely impact both currencies this week likely led traders to lighten up on their holdings.

USD/JPY held on to the 111.00 handle; EUR/USD rose from 1.1681 to a high of 1.1719; GBP/USD advanced from 1.3109 to a high of 1.3153; and AUD/USD climbed to the .7400 mark.

EUR/JPY rallied from 129.77 to a high of 130.07; GBP/JPY is up to 145.92, AUD/JPY moved up to 82.30; and CAD/JPY reached a high of 85.41.

CHF

While its lower-yielding rivals fell far behind, the franc was able to take full advantage of some risk-off flows in the market.

USD/CHF tumbled from .9926 to a low of .9879; EUR/CHF slipped from 1.1602 to 1.1568; AUD/CHF fell from .7341 to .7319; CHF/JPY rose to 112.30, and NZD/CHF is down to .6747.

NZD

The Kiwi was another currency that fought to take advantage of dollar weakness, even as its comdoll buddies stayed in the red.

NZD/USD climbed from .6806 to a high of .6835; NZD/JPY rose from 75.61 to the 75.74 area; EUR/NZD dipped to .7145; GBP/NZD is down to 1.9236; and AUD/NZD is down to 1.0847.

Watch Out For:

  • 1:00 am GMT: Chinese official manufacturing PMI (dip from 51.5 to 51.4 eyed)
  • 1:00 am GMT: Chinese official non-manu PMI (no change from 55.0 expected)
  • 1:00 am GMT: New Zealand ANZ business confidence index (-39.0 previous)
  • Tentative: BOJ monetary policy decision and presser (See preview here)