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Forex Flash: Greater interest to be short GBP, JPY, CHF, Gold - Societe Generale

There is not a great deal of conviction about a great rotation in the FX market for now, says Kit Juckes, currency strategist at Societe Generale.

"There is very little appetite to go front against the big boys (Bernanke, Draghi and BoJ in the front row), though taking down the new Canadian english scrum feels tempting (GBP weakens, but Gilt curve is steepening like an EM curve)" he notes.

Kit adds: "The result is greater interest in being short GBP, JPY, CHF, Gold than betting that the 10 year yield will break much higher. More mixed US data is not helping. Similarly there is great uncertainty as what higher yields would mean for equities or credit. The correlated question is what it means for em vs usd and fx vols..."

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Forex: EUR/USD showing weakness below 1.3350

With Nikkei index again above the 11300 handle up +1.63% for the session so far, and USD higher across the board, EUR/USD is last at 1.3344, down from previous weekly close on Friday at 1.3360. Chinese markets will be back to trading today following last week closed for New Lunar Year holiday, while US markets will be closed all Monday long over President's Day. ECB Draghi speech at 13:30 GMT will be next key risk event ahead.
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