Bank of America Global Research previews the US jobs report for the month of September, due on Friday.

"We expect payrolls to rise by a below-consensus 60k in Sep (private: 50k), but we view the weakness as largely driven by payback from Aug's unusually favorable seasonal factors. Underlying job growth is resilient at 100k+," BofA notes.

"We expect the u-rate to remain at 4.1% as the LFPR holds steady. However, payback for the jump in HH employment in Aug could push it up to 4.2%. The Sep jobs report shouldn't be a game changer for Oct hike pricing," BofA adds.

• EUR/USD fell to 1.1329 overnight, buyers emerged and the pair turned positive

• 1.1364 traded in Europe's morning, NY opened near 1.1355, up +0.12%

• USD selling, lower US yields helped drive the pair upward

• Oil gains and drops in gold, silver may have helped limit the upside

• Daily RSI turned up but pair is within Tuesday's range, suggests consolidation

• Hold below 10-DMA, monthly RSI, widening Bolli bands are bearish tech signs

• US September ADP, August PCE are key data risks in NY's morning

• Fed's Barkin, Cook, Goolsbee, Kashkari scheduled to speak today
eurusd

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

• 0.6995-0.6959 traded overnight, a fresh 2-month low was struck

• NY opened near 0.6970, pair was down -0.24% despite broad-based USD selling

• Pair was weighed down by Australia August CPI rising less than expected

• Australia yields fell sharply on the inflation data

• Drops in gold, silver and equities contributed to AUD/USD moving downward

• AUD/USD's fall stalled just short of the 76.4% Fibo of the 0.6867-0.7238 rally

• Falling RSIs, hold below 200-DMA, monthly inverted hammer are bearish signals

• US Sep. ADP jobs report, Aug. PCE are data risks in NY's morning
audusd

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

(corrects day in 3rd bullet)

• Cable climbs to 1.3295 as pound continues to benefit from UK data

• Q2 GDP upwardly revised to 0.5%; Q2 C/A deficit smaller than expected

• 1.3295 is one-week peak (1.3203 was Tuesday's three-month low)

• Offers likely around 1.3300 and 1.3322 (Sept 22 low)

• US PCE data due at 1230 GMT: 3.7% YY f/c; core f/c 3.3% YY

• BUZZ-Pound would jump at the chance of UK rejoining EU

GBPUSD

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

• AUD/USD holds sub-0.70 as it consolidates losses since Tuesday's RBA hike

• 0.6959 was nine-week low in Asia after cooler than expected Australian CPI

• Up 0.4% MM, 4.0% YY in August vs 0.5% MM, 4.1% YY forecast

• 0.6995 was Asian session high, just before the Australian inflation data

• Probability of RBA rate hike in November declines to 20%

• Australian private credit firm Metrics freezes some fund redemptions

AUDUSD

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

USD/JPY traders should be bracing for choppy price action over coming sessions, with intervention risk climbing sharply as month-end flows collide with Friday's critical US payrolls report.

The warning signs are already flashing. Wednesday's Asia session saw an unexplained 100 pip drop in USD/JPY before being fully retraced - a pattern consistent with markets on edge for official action. The options market is pricing that nervousness explicitly: Shorter dated and front-end expiry implied volatility has been marked significantly higher, while risk reversals have swung further toward USD puts over calls. The benchmark 1-month expiry 25 delta risk reversals traded 2.7 for USD/JPY downside over upside strikes - up almost 1.0 in the last week and close to the late July intervention-induced peak at 3.0.

History adds weight to the concern. Three of the last four Bank of Japan/MOF interventions have landed around the month-end turn, with the sole exception being July 2024's move, which followed a soft US CPI print. That template points squarely at this week: NFP on Friday carries elevated intervention risk, particularly if a weak print drives a fresh leg of USD weakness that authorities could exploit — or feel compelled to counter given how stretched USD/JPY has become.

With the October Fed meeting very much live and rates pricing highly sensitive to incoming data, this weeks data and especially the NFP, is shaping up as the key catalyst. The combination of stretched positioning, thin liquidity, elevated volatility and historical intervention timing makes the risk-reward compelling for being short USD/JPY and holding JPY related gamma (short dated expiry FX options) into Friday — a trade structured to benefit from either a payrolls-driven leg lower, or outright FX intervention.

Adding fuel to the fire, UBS's month-end rebalancing model has flagged USD/JPY as the standout sell signal across G10.

Related - FX options wrap — Dollar hedging demand builds on Iran, data risks
USD/JPY 25 delta risk reversals

1-week and 1-month expiry USD/JPY FXO implied volatility Click here

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

• AUD/USD FX options have increased the cost of volatility protection over recent sessions

• Implied volatility which gauges those risks when setting premium trades its highest levels since July

• Risk reversal options are a volatility play with a directional bias - they have seen a big increase too

• 1-3-month expiry 25 delta risk reversals demand the highest downside over upside strike premium since June

• The post RBA drop below 0.7000 fuels demand for volatility and downside protection

• Similar price action across G10 FX shows a market wary of more USD gains/risk aversion as US data risks loom

• Related - FX options wrap — Dollar hedging demand builds on Iran, data risks
AUD/USD FXO implied volatility


AUD/USD 25 delta risk reversals

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

• Cable rises to 1.3261 as UK Q2 GDP upward revision to 0.5% lifts pound

• 1.3261 is highest level since Monday (1.3280 was high that day)

• 1.3203 was Tuesday's three-month low, before USD retreated on Williams

• Williams sees no urgency for next Fed rate rise; Oct hike chance down to 50%

• UK Q2 C/A deficit lower than expected: £19.9 billion vs £24.7 billion f/c

• PM Burnham says UK should weigh EU options, including rejoining bloc

GBPUSD

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

• Hong Kong shares of Shandong Gold Mining climb 3.8% to HK$19.24, on track for their biggest one-day pct gain September 16

• Shanghai-listed stock gains 1.7% to 26.95 yuan, on course for biggest one-day pct rise since September 16

• Chinese gold miner says Chairman Wang Chenglong plans to repurchase company A shares through centralised bidding trading for 300 million-400 million yuan ($44.75 million-$59.66 million) with his self-owned funds

• Wang will repurchase the A shares in the next 12 months to reflect his confidence in the company's future development prospects and recognition of the company's value, while maintaining the stability of share price - co

• YTD, Hong Kong stock down 44.4%, Shanghai-listed shares down 30.6%, the benchmark Hang Seng Index down 4.5%

($1 = 6.7045 Chinese yuan)

(Reporting by Donny Kwok)

• Shares of Australia's Bellevue Gold rise as much as 3.7% at A$1.647, their highest level since September 23

• The gold miner says gold from its Bellevue Gold Project in Western Australia will be used for regilding of London's St Paul's Cathedral

• Adds that regilding is expected to require more than 50 ounces of gold

• Bellevue says its "green gold", which is gold produced using renewable energy, was a key factor in its selection

• Stock down 4% YTD, including sessions' moves

(Reporting by Shravya Marakini in Bengaluru)

• AUD/USD -0.2% Wed as Aug monthly inflation slightly undershoots forecasts

• AU Aug CPI +0.4% m/m, +4.0% y/y (Reuters poll: +0.5%, +4.1% respectively)

• RBA Governor Bullock hopes policy restrictive enough to temper inflation

• Fed President John Williams sees no urgency for next FFR hike

• Futures pricing implies chance of Oct 28 Fed hike has declined to 53.0%

• AUD targets 0.6920 support, break above 0.7063 100-DMA may shift narrative

• Range Asia 0.6970-95 support 0.6920 0.6865 0.6834, resistance 0.7282
AUD Daily 21/55/100-DMA

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

• Yesterday saw USD/JPY dip to 156.99 at the NY open before steadying

• Fed Williams dovish but others more hawkish

• US economy still chugging along , US yields remain high

• That said, Fed October rate hike expectations off, now 50-50 vs 70% prior

• USD/JPY back to a range on 157, Asia so far 157.24-46 EBS

• In wider range between 156.64 daily Ichimoku kijun, 200-DMA at 158.48

• Back into descending and tapering hourly Ichimoku cloud between 157.23-72

• Ascending 200-HMA in cloud now at 157.54, 100-HMA above at 157.78

• Lower oil prices tad yen supportive despite ongoing Middle East conflict

• Massive $1.4 bln option expiries at 157.00 USD supportive?

• Other nearby expiries today 157.50-90 total $712 mln, 158.00 $918 mln

• On 156 handle, total $1.1 bln in expiries - a collection of smalls

• JGB-US rate differentials still wide, in 2s in higher range, 10s wider

• Month/quarter/Japan fiscal half-ends today, Tokyo fix flows likely large

• Related comments , , ,

• Also , on Fed-speak

• US markets , , ,
USD/JPY:


USD/JPY nearby option expiries this week:


JGB-US Treasury 10-year interest rate differential:

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

• NZD/USD +0.2% from Tue 0.56265 ytd low, technical support may be temporary

• Pair down cumulative 5.8% since Aug 21, targets clean break below 0.5627

• ANZ NZ Sep business outlook survey results due for release Wed, prior 53.7

• Fed President Williams sees no need for urgency on next FFR rate hike

• Futures pricing implies probability of Oct 28 Fed hike has slipped to 53.0%

• Brent crude -2.2% to $102.92 a barrel as Qatar presses for U.S.-Iran deal

• Range NZ 0.5637-435, support 0.5627 0.5581, resistance 0.5995 0.6012
NZD Daily 21/55/100-DMA

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

• AUD/USD -0.6% from Tue 0.7029 high as RBA comments continue to weigh

• AU Aug CPI update 0130 GMT, Reuters poll consensus +0.5% m/m, +4.1% y/y

• RBA considered holding steady Tue, but ultimately hiked as widely expected

• RBA's Bullock hopes policy restrictive enough to temper inflation

• Fed President Williams says no need for urgency on next FFR rate hike

• AUD targets 0.6920 support, break above 0.7027 200-DMA may change narrative

• Overnight range 0.6966-0.70065 support 0.6920 0.6865, resistance 0.7282
AUD Daily 21/100/200-DMA

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

Danske Research maintains a bearish bias on AUD/USD post the September RBA meeting.

"RBA's widely anticipated 25bp rate hike had little impact on AUD/USD this morning. While the decision was unanimous and the Board left the door open for "increasing the cash rate target further if needed", markets were already pricing in 1-2 additional rate hikes going into the meeting," Danske notes.

"We maintain our negative stance on AUD/USD and expect the cross to trade lower towards 0.68 from the current level just above 0.70," Danske adds.

• Cable fell to intra-day lows at 1.3202 during NY trade. Range: 1.3202-54

• Another tepid bounce faded as USD and US yields drifted higher

• White House urges EU to draw down diesel inventories , adds to USD bid

• Risk leans towards a 1.3200 break, which would open up the YTD low at 1.3140

• So far, cross-related EUR/GBP has helped keep cable above 1.3200

• With month-and-quarter-end due Wednesday, additional USD demand cannot be ruled out
GBPUSD hourly chart

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

JP Morgan adopts a cautious bullish USD bias into this week's US September payrolls.

"Our tactical conviction in USD length has increased as strong US data, more hawkish Fedspeak, and persistent energy risks suggest scope for further near-term Fed repricing; hold long-USD basket into this week's US payrolls release," JPM notes.

"But we stop short of adding fresh USD exposure as the broader global growth backdrop remains constructive and the dollar is already approaching local highs against several currencies. The US was clearly the standout in this week's PMIs, but the improvement was not confined to the US, with the Euro area composite also exceeding expectations and pointing to a broader pickup in activity," JPM adds.

• NY opened near 0.7000 after 0.7029 traded overnight, drop extended in NY

• Extension of US yield rallies helped drive broad-based USD buying

• Drops in equities, silver, copper, oil helped reinforce the USD buying theme

• AUD/USD broke August's monthly low, hit a 2-month low of 0.6966

• The pair hovered just above that low, traded down -0.69% late in the day

• Techs are bearish; RSIs falling & pair below 200-DMA, 61.8% fib of 0.6877-0.7238

• China Sept. NBS PMIs, Australia Aug. CPI are data risks in Asia trading hours
audusd

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

Bank of America Global Research sees recent ranges holding in G10 FX into year-end.

"Ahead of the crowded central bank meeting calendar in September, we flagged that front end differentials had returned as a dominant driver of exchange rates. After the FOMC meeting, we estimated a move in US 2y rates toward 5% (our rates team's forecast), could take the DXY to the summer highs but not beyond. Both have been borne out by recent price action but leave us precariously balanced at the strong end of DXY's long held 96-102 range," BofA notes.

"Our technical view remains bullish, but our fundamental forecasts imply the range holds medium-term.," BofA adds.

• USD/CAD briefly tagged 1.42, which now raises the risk of a bout of profit-taking

• Spot has rallied from mid-1.3750s to 1.4200 with minimal pullbacks

• Overbought RSI cautions against aggressively chasing at these levels

• Broad USD moves look stretched, lowering the bar for a retracement

• Initial support at 1.4126-40, then 1.4000

• For further upside, need a decisive close above 1.4200, to keep YTD high at 1.4248 in focus
USDCAD daily chart

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Goldman Sachs reviews the September RBA meeting.

"The RBA raised the cash rate 25bp to 4.60%, in line with our and consensus expectations. The Monetary Policy Board's (MPB) decision was unanimous, with financial markets priced for 24.2bp of tightening prior to the meeting. The brief statement attending the decision retained a tightening bias and was in line with our expectations," GS notes.

"They hiked and maintained the tightening bias in the statement, saying they would increase the cash rate further if needed, but the press conference comments seemed less hawkish:...

That's consistent with our AUD view that ultimately, while the RBA hiking and being hawkish helps, it really is also a call on the broader risk backdrop, and China-specific risk in particular. That's one reason we've liked EUR/AUD downside from these levels," GS adds.

ANZ Research adopts a sell-on-rallies bias on EUR/USD.

"We view US data, Fed expectations and broader risk sentiment as the dominant drivers of EUR/USD direction in the near term. The technical backdrop also remains soft," ANZ notes.

"EUR/USD is trading below its 50-, 100- and 200-day moving averages, reinforcing the broader downtrend. Initial support is around 1.132 (1 year low), with a break opening the way towards 1.12. We see any tactical upside as an opportunity to sell. Resistance is seen at 1.14 and then 1.154," ANZ adds.

• 0.7029-0.6979 traded overnight, a 2-month low traded, NY opened near 0.6995

• Pair fell despite RBA 25bps hike & possibility for more hikes to come

• Broad-based USD buying, overnight drops in gold, silver, copper weighed on AUD/USD

• Drops in oil and USD/CNH also could not inspire AUD/USD bulls

• Pair's bounce off the low aided by US yield drops, equity gains

• Techs are bearish; RSIs falling, pair below 200-DMA, 61.8% Fib of 0.6867-0.7238

• September's monthly inverted hammer candle reinforces bearish signals

• US Aug. JOLTS, Sept. consumer confidence are data risks in NY

• Fed's Bowmna, Barr, Goolsbee, Musalem, Williams, Waller to speak today
audusd

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