Summary:

  • FX market has been muted so far with the US dollar being delicately lower
  • Bitcoin and IBEX have drawn attention, the first rises close to 7%, the latter is up 1.6%
  • GBP and EUR could be exposed in the short-term based upon the CFTC analysis

The beginning to the new week has been quite listless so far with contained moves across major markets. Taking a closer look at the FX one may notice that the GBP is rising the most (0.4%) whereas the NZ dollar along with its counterpart from the US are on the back foot. The former is being depressed on the back of fresh politics-related remarks delivered by the new NZ finance minister who suggested that interest rates might move down due to a planned reform of the RBNZ. In turn the US dollar has been under pressure on the back of revelations surrounding the election of the new head of the Federal Reserve.

Looking beyond the FX market one may spot that Bitcoin and the Spanish index (SPA35 on xStation5) have been the major movers thus far. Bitcoin surged close to $6300 (the price quoted on xStation5 platform) before pulling back slightly on Monday morning but it’s remained elevated either way. The exact causes which could have fueled a rally seen over the weekend weren’t clear, however they may be related to a so-called fork which we wrote about more on Friday.

The Spanish equity market got a foothold at the opening due to steps taken by the govt in Madrid which in the long-term could be conducive to Spanish assets by in the short-run could cause some uncertainties. 

The latest CFTC report revealed slim changes when it comes to the speculative positioning across the FX market. Nevertheless, we’ve just entered the key week with regard to macroeconomic events therefore the CFTC numbers appear to be especially of note. Based on this analysis we see some risks surrounding buying the pound in a run-up to the BoE meeting on Thursday albeit let’s begin with the single currency and the ECB meeting last week.

If you thought the ECB was a big event, hold your breath. This week can bring about even bigger moves with some cornerstone events like the Bank of England decision, US non-farm payrolls and inflation and the FOMC meeting. EURUSD was in this spotlight last week, this time we move on to GBPUSD.