Morgan Stanley Research summarizes its views on EUR, JPY, and GBP.

"EUR View: Neutral | Skew: Bullish.  EUR/USD faces upside risks from what we expect will be a further weaker USD, but EUR's own headwinds from an overly-hawkish ECB pricing and an expected increase in election risk premium make EUR an attractive funder on crosses," MS notes.

"JPY View: Neutral | Skew: Bearish. While the market is pricing in a sharper BoJ rate hiking cycle, USD/JPY could trade higher on the back of strong global risk sentiment and elevated US terminal rate pricing despite a modest US inflation print.

GBP View: Neutral | Skew: Bearish. We expect GBP to be a medium-term laggard from a dovish BoE pivot, but that will take time to play out, and its reasonably high carry may help support it versus low-yielding peers in the interim," MS adds.

• EUR/USD -0.04%, USD/JPY 0.12%, GBP/USD -0.1%, AUD/USD 0.04%

• S&P E-minis -0.49%, DAX -0.33%, Nikkei 225 -2.54%, FTSE 0.01%

• EUR/USD short squeeze may extend towards 200-DMA at 1.1630

• USD/JPY edges higher as exporters and importers grapple

• GBP/USD retreats from three-month peak as oil prices rise

• AUD/USD deflated by Asian stock losses

• Option expiries . U.S. Open
(Martin Miller is a Reuters market analyst. The views expressed are his own)

• The FX hedging of OTC option strikes can intensify as their expiries loom, especially the larger ones

• That hedging activity can often draw spot toward the strike, especially when markets are more subdued

• The biggest EUR/USD strikes for Tuesday's 10-am New York cut (14.00 GMT) are 1.1570-75 on €2.3 billion

• There's €733 million at 1.1600 Tuesday and another €1.8 billion at 1.1600 Wednesday

• Thursday has €1.2 billion at 1.1600 and €2.5 billion at 1.1550. But look out for 1.1500 at the end of the week

• If EUR/USD should come under pressure, there are a massive €4.1 billion 1.1500 Thursday and €11 billion Friday
EUR/USD FX option strike expiries August 18-21


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY 2-week 161 JPY put/USD call bought on several hundred million USD early Tuesday

• Such trades not uncommon this week, covering risk of further USD/JPY recovery from post-intervention lows

• JPY call buyers remain active too, still hedging the risk of intervention and lower USD/JPY

• Risk reversal options show JPY call-over-put volatility premiums easing - 1-month 1.9 from 3.0 post-intervention

• 1.4 was the pre intervention level and likely support on any further declines while the intervention risk lingers
USD/JPY 25 delta risk reversals


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• Traders betting in excess of $12 billion on CAD dropping

• USD/CAD has sunk from 1.4248 in July to 1.3845 in August

• The 200-DMA is 1.3848

• A 61.8% retrace of May-Jul 1.3550-1.4248 rise is 1.3817

• Bearish signal when 21-DMA fell below 55-DMA on Aug 10

•
USDCAD


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• FX option risk reversals charge a volatility premium for strikes in one direction versus the other

• Its a volatility play, but pricing offers clues on the perceived directional risks in a currency pair

• Benchmark 1-month expiry EUR/USD 25 delta risk reversals have seen a recent shift in pricing

• The contract has lost its downside over topside strike premium for the first time since February

• Though yet to adopt a topside strike premium, pricing shows risk tilting toward EUR/USD gains

• Related - FX options wrap - EUR/USD topside, Fed risks, cheap GBP/USD protection
EUR/USD 25 delta risk reversals


(Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/KRW slides to 1410.0 from Tues open 1415.5; KOSPI -1.8%

• Ignores mild USD/JPY rally which is supporting other USD/AXJ pairs

• Potentially reinstates bearish chart bias, pending close below 1411.0

• That would place it back inside Bollinger downtrend channel

• Most Asian stocks drop on Wall St cue, higher oil prices due to Iran

• S. Korea exporter flows likely the main driver for USD/KRW still
KRW


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• FX option strikes expire at 10am New York/14:00 GMT on Tuesday August 18

• EUR/USD: 1.1495-1.1500 (1.2BLN), 1.1570-75 (2.3BLN), 1.1600 (733M)

• GBP/USD: 1.3500-10 (312M). NZD/USD: 0.5900 (250M)

• AUD/USD: 0.6950 (863M), 0.7045-60 (545M), 0.7170 (240M)

• AUD/NZD: 1.1875-80 (253M), 1.2280 (290M)

• USD/CAD: 1.3820-25 (733M), 1.3875 (892M), 1.3975 (275M)

• USD/JPY: 158.00 (795M), 158.95-159.00 (468M), 159.15-25 (1BLN), 159.45 (275M)

• 159.90-160.00 (845M), 160.50-60 (576M)

• FX options wrap - EUR/USD topside, Fed risks, cheap GBP/USD protection (Richard Pace is a Reuters market analyst. The views expressed are his own)

• AUD/USD +0.4% wtd as USD continues to struggle as traders trim FFR hike bets

• Iran threatens escalation as peace talks stall; Trump threatens to bomb Oman

• Brent crude +0.6% Tue at $91.40 a barrel as oil supply concern returns

• AUD break above 0.7130 short-term resistance would enable fresh leg higher

• U.S. Jul import prices & industrial production (poll +0.3% m/m) due Tue

• RBA Deputy Governor Andrew Hauser fireside chat in Brisbane Wed

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Range Asia 0.71035-139 support 0.6920 0.6866, resistance 0.7130 0.7190-00
AUD Daily 21/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• EUR/USD and most EUR crosses off from recent highs, EUR/USD 1.1576-85 EBS

• EUR/USD off after rally to 1.1614 yesterday, capped by 1.1630 200-DMA?

• Heading towards rendezvous with 1.1548-66 ascending hourly Ichimoku cloud?

• Option expiries today to again help contain spot, 1.1500-75 total E3.5 bln

• E2.3 bln alone at 1.1575 strike to help cap any upside

• EUR/CHF 0.9390-91 EBS, off from 0.9409, 0.9406 highs Friday, yesterday

• Into ascending hourly Ichimoku cloud between 0.9383-91

• Carry demand sated for now?

• EUR/GBP 0.8547-48 and off from 0.8559 high yesterday

• Holding in tad lower between 0.8546-59 range since last Wednesday

• Looking to break into descending hourly Ichimoku cloud between 0.8569-0.8619

• EUR/JPY outlier of sorts, bid, 184.55-68 EBS, in 184.17-78 daily cloud

• 100-DMA 185.09 above cloud, ascending 200-DMA 184.00 below

• Related comments , , , also
EUR/USD:


EUR/CHF:


EUR/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• Australian miners rise as much as 1.6%, their highest level in a week

• Miners gain on the back of rising copper prices that hit their highest in more than six months on Monday [MET/L]

• The world's largest copper producer, BHP Group rises as much as 4.2% after the miner logged FY underlying attributable profit of $13.20 bln, above Visible Alpha consensus of $12.66 bln

• Rival Rio Tinto up as much as 0.6%

• YTD, AXMM up 18.4%
(Reporting by Aamir Sheik Khalid in Bengaluru)

• USD/JPY back on 159 with USD seeing some bounce after another fall overnight

• That said, USD/JPY upside seen limited with Japanese exporters on warpath

• Good selling yesterday and more likely today despite importer demand

• JGB-US Treasury rate differentials narrower still too, in 2s to @246 bps

• Moves in line with fading Fed rate hike expectations, higher JGB long yields

• Technically, USD/JPY still in 158.92-161.38 daily Ichimoku cloud

• Looks capped above 159.59 daily kijun, 100-DMA above at 160.00

• Hourly shows push back towards 159.29 100-HMA, kijun 159.22, cloud 159.08-12

• Underlining support on this chart at ascending 200-HMA at 158.86

• Option expiries today include 159.00-25 total $1.4 bln, 159.45-90 $1.2 bln

• USD strength on Middle East developments getting old, focus shifting?

• Related comments , , , also

• US markets , , ,

• On Middle East , Fed , Trump

• On flows/US Treasuries , for more click on [FXBUZ]

USD/JPY daily:


USD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD -0.5% from Mon's 11-week 0.5926 high, but remains +4.7% since Jun 26

• Breach above key 0.5910 level opens door to extension toward 0.5995

• Break of 0.5925-30 short-term resistance will reaccelerate rally

• Stalled U.S.-Iran peace negotiations triggers escalation threats from Iran

• Oil supply concerns retake market attention, WTI +0.7% Tue to $85 a barrel

• U.S. Jul import prices & industrial production (poll +0.3% m/m) due Tue

• NZ Jul balance of trade update, and Aug S&P manufacturing PMI due Fri

• Range NZ 0.5899-0.59055, support 0.5762 0.5627, resistance 0.5925-30 0.5995
NZD Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.3 from Mon 0.7129 high, but momentum remains tilted to topside

• Break above 0.7130 short-term resistance would trigger fresh acceleration

• Iran threatens Strait of Hormuz escalation over stalled peace negotiations

• Brent crude +2.9% to $91 a barrel as supply concerns come back into focus

• RBA Deputy Governor Andrew Hauser fireside chat in Brisbane Wed

• AU Jul jobs update Thur, Reuters poll consensus +15k jobs, 4.4% unemployment

• Overnight range 0.7101-29 support 0.6920 0.6866, resistance 0.7130 0.7190-00
AUD Daily 20/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

ANZ Research discusses its tactical GBP outlook in the near-term.

"Overall, we remain neutral on GBP/USD. On the crosses, we prefer fading GBP strength against AUD and NZD," ANZ notes.

GBP/AUD remains vulnerable as Australia's improving terms of trade continue to support the AUD, and we see any rally in GBP/AUD as a sell opportunity. Technically, GBP/AUD faces near-time resistance at 1.919," ANZ adds.

• GBP$ firm in NY afternoon, +0.2% at 1.3550; Monday range 1.3571-1.3534

• Pair extends gain to 2-month high at 1.3771 in early Europe trade, hovers nearby

• UK employment, earnings data on Tuesday in focus for clues to BoE policy path

• Wednesday UK CPI/PPI/RPI may also hold clues to MPC rate moves into YE 2026

• Soft UK employment/prices may stall the current GBP$ bullish tenor

• LSEG's IRPR indicates MPC likely on hold in Sept, +31bp by Dec MPC meeting

• GBP$ res 1.3571/74 Mon high/upper 30-d Bolli, 1.3658 daily high May 1

• Supt 1.3534 Monday low, 1.3495 rising 10-DMA, 1.3434 the Aug 7 low

GBP Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

• NY opened near 1.1590 after EUR/UD hit a 2-month high of 1.1614 in Europe

• The overnight rally was driven by USD, US yield drops

• Rallies in gold, silver and equities contributed to EUR/UDS's overnight gains

• Sellers emerged in NY however as the dollar & yields moved upward

• Equities turned down & oil rallied which helped weigh on EUR/USD

• The pair neared 1.1575 in NY's afternoon, traded up only +0.07% late in the day

• Daily inverted hammer candle formed which may be a concern for EUR/USD bulls

• Rising RSIs, pair's hold above the 10- & 21-DMAs gives bulls some comfort though
eurusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• AUD/USD hit a 2-1/2-month high of 0.7129 just ahead of NY's open

• The rally was aided by USD, US yield drops & gold, silver, copper rallies

• NY opened near 0.7125, the pair steadily fell during NY trading

• USD, US yields moved upward, stocks fell & USD/CNH rallied toward flat

• AUD/USD fell below 0.7105, it traded up +0.30% in NY's afternoon

• Techs lean bullish; RSIs are rising, pair is above the rising 10- & 21-DMAs

• August's bull hammer, hold above 50% Fib of 0.7277-0.6867 adds to bull signals
audusad


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Morgan Stanley Research previews the UK labor report and the US industrial production print for the month of July due on Tuesday.

"UK Labour Market: We expect the jobless rate at 4.8% (risks of rounding up to 4.9%), participation at 63.9% and employment growth of 100k 3M/3M, and unchanged HMRC payrolls in July — the labour market adding slack only very gradually,"MS notes.

US Industrial production: We expect manufacturing IP excluding motor vehicles and parts to fall slightly by 0.02%, as aggregate hours worked in nonauto manufacturing remained broadly unchanged in July (+0.016% m/m)," MS adds/

• Shares of gold miners up, tracking rise in bullion prices [GOL/]

• Spot gold up 1.2% at $4,426.52 per ounce, supported by a weaker dollar and fading expectations of a U.S. Federal Reserve rate hike, while investors continued to monitor geopolitical tensions in the Middle East

• The gold market appears to be pricing in a stagflationary environment, with softer employment and expectations that the Fed will tolerate current inflation levels, said Bart Melek, global head of commodity strategy at TD Securities

• Top miners Barrick Mining and Newmont up 2.6% and 2.9%, respectively

• South African miners Gold Fields rises 3.6%, Harmony Gold jumps 3.9% and AngloGold Ashanti gains 3.8%

• Canadian miners Kinross Gold up 2.2% and Agnico Eagle Mines rises 2.4%
(Reporting by Varun Sahay in Bengaluru)

MUFG Research reviews Japan's anualised Q2 real GDP report.

"JGB yields are higher today despite the release of weaker than expected real GDP data today in Japan. Annualised Q2 real GDP grew by 1.1% Q/Q, down from 1.9% in Q1 and below the consensus of 2.0%. There were two clear areas of weakness – business investment which fell sharply by 1.2% Q/Q and personal consumption which was flat in contrast to the consensus for a 0.4% gain (both non-annualised). Inventories and net exports were the areas of growth," MUFG notes.

"This is certainly a weaker GDP report and will provide a challenge to the messaging from hawks at the central bank pushing for a more aggressive rate hiking path. In particular, the business investment backdrop was indicative of a corporate sector that is weaker than generally assumed based on other business sentiment data," MUFG adds.

• Cable has traded a 15 pip range since the NY open; 1.3551-1.3566

• 1.3566 is five pips shy of the London morning three-month peak

• Friday high was 1.3561, after unexpectedly negative U.S. retail sales data

• Raft of UK data due this week, starting with pay on Tuesday at 0600 GMT

• UK inflation figures due Wednesday; CPI is forecast to rise to 2.9% YY

• Iran threatens to go on the offensive in Strait if diplomacy with U.S. fails

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research highlights the key findings from its latest FX and Rates Sentiment Survey.

The recent interventions have failed to turn JPY sentiment around. On the contrary, JPY bearishness increased considerably over the past month, reaching four-year high," BofA notes.

JPY bearishness primarily reflects survey respondents' concerns that the BoJ remains behind the curve and is consistent with a further deterioration in sentiment toward Japanese duration. While bearishness on both Japanese rates and the JPY is elevated relative to the start of our sample in Dec-2011, positioning appears less extreme than sentiment would suggest. To us, this suggests investors await greater clarity on the BoJ's policy path, favouring carry in the meantime

What terminal rate could stabilize the JPY? Most respondents believe that 2% (i.e., four additional hikes) could do the trick," BofA adds.

Goldman Sachs Research on yen outlook in light of the latest wave of yen-buying intervention.

"If none of the catalysts for Yen strength materialize, the impact of the intervention should further diminish, clearing the path for the Yen to weaken to fresh lows just as it did in the aftermath of the April-May intervention earlier this year," GS notes.

"The steady climb in USD/JPY since the intervention reflects the underlying depreciation pressures and the lingering skepticism that the domestic policy mix or broader macro backdrop can shift enough to sustainably support the Yen. Additional interventions can continue to buy time and wash out speculative positioning, but only for so long," GS adds.