USD/JPY rally sits on thin ice – TDS
The preliminary Markit PMIs for February will lead the US data calendar on Friday, as market participants continue to look for any signs of concern related to the novel coronavirus. JPY has strengthened across the board (+0.25% vs USD), analysts at TD Securities inform.
“The surveys released so far related to Markit PMIs for Feb have not only failed to flag any issues but have also surprised to the upside.”
“We look for existing home sales to decline 2.3% m/m in Jan following the firm 3.6% rise registered in Dec.”
“Lastly, a number of Fed officials will be participating in the Chicago Booth's US Monetary Policy Forum that is scheduled to start at 10:15am ET. Key participants include Fed voters Clarida, Brainard and Mester, and the ECB's Philip Lane.”
“JPYUSD is trading ~3.5% rich on our tactical model, suggesting the ominous rally sits on thin ice especially as major global equity benchmarks look overbought.”