Rates as of 0630 GMT
Market Recap
Hard to pin a reason on movements when other markets are largely closed
While trading in most government bonds has effectively stopped, Treasuries continue to trade and boy, are they moving! Heres a quick little table of changes since Thursday morning.
The US at the top and AU and NZ at the bottom of the table should help to explain their positions in the currency table at the top of this comment.
If we graph the change in the currencys value vs the movement in the bond market, we get a 95 correlation 73 if we eliminate USD. Thats good enough for me. For USD value we take the movement of the DXY index, flawed though it may be.
In short, the market is still working on the monetary policy divergence theme. Thats positive for USD and negative for JPY and EUR.
Le Pen in trouble? Reuters has a story saying, French prosecutors said on Sunday they are examining a report by the European Unions antifraud agency accusing farright presidential candidate Marine Le Pen and members of her party of misappropriating thousands of euros worth of EU funds. This could have an impact on next Sundays runoff in the French election. Its a EURpositive development.
Commitments of Traders CoT report
Speculators were generally less bullish on USD in the most recent week. They increased their long EUR position and trimmed their short AUD while adding to long CAD and especially long MXN. On the other hand they increased their short GBP and JPY…