Intraday Market Thoughts Archives

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US Roundup & China Saturday Data

USD slumped Friday on lingering govt shutdown fears while EUR surged 200 pips to nearly 1.45. Brent touched $123 and WTI hit $112 as fresh protests erupted in the Middle East, gold hit a record for the fourth consecutive day and silver broke $40/ounce.

Negotiations are continuing to avoid a U.S. government shutdown ahead of Friday's midnight deadline -- a deal is appearing more likely but still uncertain. Dollar weakness on Friday is partially due to shutdown fears but we expect this is overdone and those positions will be covered when markets re-open whether or not there is a shutdown. FEARS THAT US WOULD STOP PAYING INTEREST on its debt in the event of a shutdown, triggering default but this is an absurd notion as the implications for such a move would be catastrophic. The real risk is that a prolonged shutdown stymies economic growth. Dollar selling could get more aggressive later in the coming week if there is no deal.

CANADIAN EMPLOYMENT data was better than it first appeared and CAD rebounded from earlier losses. Although Canada shed 1.5K jobs in March ALL THE LOSSES WERE IN PART-TIME positions, while full-time employment increased a whopping 90.6K. The unemployment rate fell one tick to 7.7%, as expected. The Bank of Canada meets Tuesday and is expected to hold rates at 1.00%.

OIL was boosted by a military deadlock in Libya and protests with at least 19 dead in Syria. In addition, an election in Nigeria on Saturday is a risk. Traders look to be long oil on weekends due to the potential for political instability.

Fridays CFTC COMMITMENT OF TRADERS report showed speculators turning aggressively AGAINST THE YEN. After six weeks in a net long position including +7.0K last week yen positioning fell to a net short 43.2K contracts. AUD continues to be the darling of futures traders, hitting FRESH RECORD +90.9K NET LONGS. The net long euro position expanded to 58.9K from 56.6K and the market remains short of the U.S. dollar but positions were trimmed slightly. The CFTC will be mostly be closed if the U.S. government shuts down, meaning this will be the final Commitment of Traders report until a budget is passed.

CHINA SATURDAY DATA

Chinese trade balance data will be released for March on Saturday. The consensus is for a $3.35B deficit after the first deficit in 7 years (-$7.3B) in February. Ignore the deficit/surplus and focus on imports as they are a leading indicator for worldwide demand. The consensus is for a 19.5% year-over-year increase. Expect to see commodity currencies (especially AUD) climb on a reading above 22% or slide on something below 17%.

By AB - AshrafLaidi.com Staff

UK inflation still a problem, Canada employment disappoints and Portugal bailout to be finalised by mid-May.

UK FACTORY ORDERS gates prices continue to push higher on the back of rising fuel costs making the Bank of England's job no easier when it comes to their next rate meeting. PPI input prices remained at 14.6% year on year despite expectations of a slight fall. As a front runner for CPI the omens dont look promising for a fall back in the CPI numbers next week. GBP continues to find progress beyond 1.6460 tricky in the short time while against the euro it has lost ground above 0.8800 to bring 0.8850 back in to play.

CANADIAN EMPLOYMENT data was a massive disappointment with a decline of 1.5k in March when markets were expecting a gain of 26.5k. This has seen the Canada dollar pull back from its strongest levels of the day at 0.9527 in spite of the surging oil price, which continues to make fresh 30 month highs.

A TARGET DATE OF MID-MAY has been set to agree some form of bail-out for Portugal, however a number of problems still remain including the agreement of more severe austerity measures. How these will be sanctioned by the Portuguese parliament when a less severe budget was rejected is one of a number of problems that need to be thrashed out. EURUSD remains on course for 1.4580 while above 1.4250.

By KM -AshrafLaidi.com Staff

UK inflation expectations are put to the test today by the release of UK March PPI, while Canada jobless for March is expected to improve. US dollar sinks further on lack of budget deal.

Back to a tamer calendar in the way of economic data releases today with UK PPI for March expected to invite further debate about the Bank of Englands decision to hold rates yesterday. Factory gate prices have CONTINUALLY LED the official inflation numbers which are due out next week, therefore, these are expected to be no different and are expected to remain elevated. Year on Year input prices are expected to come in around 13.2%, down from prior months 14.6% while core output prices are seen around 3%.

GBP regains $1.6350s foundation after bouncing off 1.6260 support, now eyeing the 1.6460s highs from last year as the next key objective. EURGBP has yet to surpass 0.8850. EURUSD looking to regain $1.44 despite Trichets coyness on whether or not there would be plans to raise rates again. Keep an eye on 1.4580, which is the high from last year.

CANADA EMPLOYMENT REPORT for March is due out at around midday UK time and the unemployment rate is expected to slip back to 7.7% from last months 7.8% with a net change of 27.8k, a slight increase of last months 15.1k.

CAD still rides on the back of higher oil despite USDCAD aiming to find support at 0.9570. Yet, we remain well above the all-time lows of 0.9060 from 4 yrs ago. Fresh 30-month highs for both US crude & Brent, while silver hits the $40 mark, and gold holds above $1,460. USDX HITS 16-mnth lows, nearing 75.00 as the US budget saga & looming gvt shutdown weighs on the currency.

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By KM - AshrafLaidi.com Staff.

No "vigilance" from Trichet and a strong aftershock in Japan ended a six-day winning streak in EUR/USD and triggered a yen rebound. The commodity rally and whippy price action in AUD/USD will be the focus in Asia.

EUR/USD initially fell after Trichet said THURSDAY's s RATE HIKE was not necessarily the "first of series " and held off using the code word for "strong vigialance", which indicates a further imminent rate hike. The euro’s decline following the press conference was short-lived, however, and EUR/USD ended the day only fractionally lower. The price action points to a continued appetite to accumulate euros. The market is priced for two quarter-point hikes by year end and a high probability of a third hike.

A 7.1 MAGNITUDE EARTHQUAKE struck Northeastern Japan at around midnight local time. A knee-jerk round of risk aversion sparked a yen rally but there have been no reports of large-scale damage or problems at nuclear installations. A clearer picture will emerge as the sun rises.

Last-minute meetings to avoid a U.S. GOVT SHUTDOWN on Friday appear futile but with in Washington there is always a chance of a deal. The market still doesn’t care as most anticipate that any shutdown will be short-lived. Jobless claims were at 382k compared to 385k expected.

ASIA PACIFIC PREVIEW

Japan’s current account surplus (Exp: ¥1.33 trillion) and the BOJ’s monthly report are the only notable events in the Asia-Pacific session.

The aftershock caused a 40-pip blip in USD/JPY as it fell to 84.60 and then rebounded back to 85. Keep a close eye on USD/JPY. Thursday's decline was the first in two weeks and gives us a chance to gauge the market's appetite to sell yen. The end of the week would typically offer an opportunity for further profit taking (USD/JPY declines) but fresh gains would point to an extended rally. AUD/USD price action since the employment report has been treacherous. The pair initially rallied 50 pips to 1.0480 but quickly gave up half the gains. Early in North American trading the pair pushed to a record 1.0507 but quickly retreated back to 1.0411 then edged up to 1.0470. Medium and long term signals are pointing to further gains but whippy trading around a news event like the jobs report often signals a short-term top.

THE COMMODITY RALLY continues with gold and oil hitting fresh highs on Thursday. The Middle East remains a key driver of resources but other sources of recent strength include: 1) the spiraling costs of rebuilding in Japan 2) Continued easy money from the Fed 3) renewed signs of growth in emerging markets, especially China. The street is growing more bullish on China on hopes it can bring inflation under control and speculation that it is nearing the end of its rate hike cycle. These calls may be premature but a soft landing in China is the most compelling reason to buy commodities, CAD and AUD.

By AB - AshrafLaidi.com Staff

The ECB raised rates by 25 bps to 1.25%, which JC Trichet later explained as a move intended at anchoring inflation expectations. ONE REASON for the market to expect this rate hike may NOT be followed by subsequent moves is Trichet's reference to the negative growth risks resulting from rising inflation. Spoken like a true central banker from the German School (all prev Bundesbank heads), Trichet suggested to start via interest rates to address inflationary expectations, only then for growth to remain in track. Since Trichet indicated todays tightening was not necessarily the first of a series of rate hikes, EURUSD came under pressure, down a full cent from its $1.4349 highs. Risak appetite recedes to the benefit of the $USDX & yen, as yen crosses pull back. GBPUSD also at its session lows. At this point, I continue to see bottom fishing in USDJPY at 84.70s for fresh attempt into 85.50 & 86.30 later into the month. AL

Portugal's final acceptance of its fate was in no doubt prompted by the inevitability of today's rate hike by the ECB, allied to the high borrowing costs associated with yesterdays short term t-bill auction.

Before the ECB, we have the BANK OF ENGLAND, which is likely to hold rates given the UNLIKELY SCENARIO of getting two extra votes in the hawk camp and the uncertainty with respect to recent economic data. SEE PREV IMT (by AB) for more detailed analysis on the balance of votes within BoEs Monetary Policy Committee. The Bank will probably wait until they have sight of Q1 GDP data later this month, even though inflation data next week is likely to exert further pressure on them to raise interest rates to prevent consumer expectations of it becoming embedded.

THE ECB is likely to have no such qualms, despite an inflation rate half of the UKs and are expected to hike rates by 0.25%. This is pretty much discounted as a given so it would be a major surprise if they were to hold. In the event markets get what they expect the post meeting press conference will be critical in how Trichet justifies any rate hike, and whether or not it is the first of many. US WEEKLYCLAIMS expected to come in around 385k. EURUSD broke 1.4280 trend line resistance from the 1.6040 highs in 2008 and the upside risk is now is test the 2010 highs at 1.4580. EURGBP still eyeing 0.8800, but unlikely to make it above 0.8850. Downside seen stabilizing around 0.8680. GBPUSD continues to find sellers above 1.6350 and good buying interest around 1.6180.

By KM -AshrafLaidi.com Staff

AUSSIE SPIKE & ECB SCENARIOS:

AUD/USD SPIKES to $1.0480, hitting a a new post-flotation high of 29 years, after a stronger than expected set of March employment data out of Australia. March job creation saw a 4-month high 37.8K jobs added (above expected 24K), unemployment rate fell for the first time in 3 months to its lowest level in over 2 years at 4.9%. Full-time / part-time breakdown made this number particularly bullish - 32K new jobs were full-time against net gain of 5.7K in the more transient part-time sectors. Recall this breakdown was critical in the prior month's employment report - even though February saw a net loss of 10K jobs, strong full-time component put a lid on a sustained AUD damage. The decline in unemployment rate was also made particularly impressive by an uptick in labor participation rate - something we have yet to see in improved jobs data stateside. Strong jobs growth two months removed from the Queensland flooding disaster should restore RBA confidence, yielding a more hawkish statement in May than what we saw earlier this week. That NZD and CAD fell to session lows just as AUD was rising after the jobs report did not escape our attention - most likely explanation is recalibrated carry positioning into the higher yielding Aussie dollar.

Turning to the UPCOMING ECB DECISION, it appears the euro rally has priced the expected 25bp rate hike to perfection. Obviously, decision to keep rates unchanged - not entirely out of the question given that the ECB's "strong vigilance" signal DID NOT have a 100% track record as a predictor of a tightening - would result in severe EUR damage. Even a 25bp hike may see some "sell-the-news" weakness. Instead, the focus will be on the 8:30ET press conference by President Trichet. Today's WSJ offers a terrific "playbook" of possibilities: The most bullish scenario would be another reference to "strong vigilance", indicating another rate hike in May. If the ECB pledges to monitor inflation "very closely", history suggests the next policy move is 2 months removed. The most dovish scenario is "monitor closely", implying at least 3 meetings before another rate hike. Beyond today's high around $1.4350, 78.6% retracement of the late 2009 swoon around $1.4440 looms as the next area of resistance.

By GG - AshrafLaidi.com Staff

Bank of England Preview:

The OIS market is pricing in just an 8% chance of a BOE rate hike

Thurs while all 32 economists surveyed by Bloomberg expect no change. The decision is at 7:00 EST, 11:00 GMT, 12:00 BST. Remember there is no statement when there hasnt been a change in policy. Beware though that the BOE is the most unpredictable G7 central bank and GBP pricing probably reflects a higher probability than 8%. A similar story unfolded in the past three BOE decisions and the pound has weakened following announcements that the Bank Rate would stay at 0.50%. On Wed., NIESR estimated growth of 0.7% in Q1 (not annualized) after a 0.5% decline in Q42010. That puts average growth at 0.1% over the past six months not enough to hike rates. At the March 10 BOE meeting Governors WEALE, DALE, arch-hawk SENTANCE voted for hikes. The dissenters will need two more votes. Governor King and top Deputies BEAN and TUCKER wont change course and POSEN is the most dovish member. Risks come from FISHER and MILES but neither has made any indication he will vote for a hike. No change may see

cable weaken off 25-40 pips while a hike would send the pair soaring. Accordingly, GBP weakness resulting from no rate hike is most likely to be played out against EUR, as the cross retests 0.8810 until facing the key 0.8850s.

By AB - AshrafLaidi.com Staff

U.S. Roundup & Asia Preview: A bailout doesnt have the effect it used to as EUR/USD shrugged off Portuguese request for a funds and climbed to a 14-month high; USD fell with the Fed stuck on the sidelines and a U.S. government shutdown looming; and CAD hit a 3-year high on oil and a strong PMI. In Asia/Pacific, Australia is expected to add 23.1K jobs

in March and the BOJ will announce fresh stimulus.

Portuguese PM Socrates announced he will turn to the EU for aid but the euro rallied as high as 1.4349 due to: a) an expected ECB hike on Thurs and b) an eventual bailout (most thought in June) was essentially a foregone conclusion. The market reaction is a surprise but if euro strength holds up through Thursday, it bodes well for the euro. USD struggled (gaining only against JPY) as commodities climbed and the focus shifted to budget problems. Parts of the U.S. government affecting 800k employees will shut down on Friday if legislators fail to pass a budget. The move is now highly likely and is currently weighing on the dollar but an analysis of past two shut downs (last in 1995) shows the USD has been rather indifferent. The risk is that anextended shut down will weigh on growth. CAD WAS POWERED BY Canadas manufacturing PMI. USD/CAD hit a 3-year low of 0.9568 after the Ivey PMI jumped to 73.2 from 69.3 (Exp: 65.2). The pair retraced back to 0.96 afterwards in yet another example of how this volatile indicator sparks outsized CAD moves that arent sustained. WTI hit $109 but CAD is trading more with the risk on/risk off theme than with oil at the moment.

ASIA PACIFIC PREVIEW: AUD/USD rallied to a fresh record high Wednesday after two days of declines ahead of Thursdays employment report at 0230 GMT. The market may still be priced for a slightly higher print than the 23.1K

consensus after a 10.1K contraction in Feb. This leaves AUD vulnerable

as the RBA described rates as mildly restrictive in Tuesdays rate

decision. A second negative print may prompt a rate cut later this

year while AUD bulls may start taking profits quickly after a print

near +40K. BANK OF JAPAN: decision has no fixed time but is usually delivered around 0400 GMT. A press conference follows. The yen will continue to take out stops as the BOJ announces further dovish measures.

A BoE PREVIEW TO FOLLOW LATER IN THE EVENING

By AB - AshrafLaidi.com Staff

EURUSD hits $1.43 as the countdown to Thursdays the ECB decision remains under scrutiny. The Fed may have revealed some of its hawks, but nothing compares to the CPI validation for an ECB rate hike. US calendar is light on economic data with the exception of oil inventories from the DoE. That report follows one day after the private weekly assessment from American Petroleum Institute (API), which registered a draw of 2.8M barrels against expectations of an inventory build -- the FIRST DRAW SINCE MARCH and also the largest volume of demand since early January. Crude popped up back above $108/brl in Asian electronic trade. Gold and silver retain a firm bid as well, in uncharted territory for the former above $1,455 and a 30-high for the latter on approach to $40/oz. On the MONETARY FRONT, sign of a growing rift inside the FOMC was evidenced in yesterdays minutes, which specifically, the minutes contained a new passage stating: "almost all meeting participants indicated that they saw no need to taper the pace of the Committee's purchases of Treasury securities." Benchmark 10-year treasury yields rose a few ticks within a basis point of 3.50% following the minutes' release. In echo, St. Louis Fed President Bullard (non-voter) told the Wall Street Journal he would urge the FOMC to cut its $600B QE2 program short by $100B at the late-April meeting. Resiliency in Asia was boosted by strength of the Chinese market as the Shanghai Composite returned from an extended holiday with an assault on the psychologically critical 3,000 level - a 1% gain, all the more impressive considering the PBoC key 1-year rate tightening overnight. USDX deepens the break of the 3-yr trendline support and is increasingly vulnerable to being dragged towards the next key low of 74.23, last seen in Nov 2010.

By GD - AshrafLaidi.com staff.

China's surprise rate hike keeps the focus on the inflationary genie and the various global central banks attempts to keep it in its bottle. Chinese non manufacturing PMI earlier this week suggested prolonged robustness as does this mornings HSBC services PMI for March, which came in at 51.7 as Chinese authorities strive to front load their fight against inflation. Todays UK focus ahead of tomorrows key rate meetings remains on the pound with the release of Feb industrial and manufacturing production data with expectations of increases of 0.4% and 0.6% respectively. While there is also the small matter of a PORTUGUESE BOND AUCTION TODAY of EUR 1bn of six and twelve month bills after another Moodys downgrade yesterday, we also have Eurozone final GDP numbers for Q4, with no change expected from the previous print of 0.3%. Yesterdays weak Ezone Feb retail sales shows consumers remain as cautious as they are in the UK, despite similarly positive PMI figures. EURUSD nears CONFLUENCE RESISTANCE OF 1.4280. EURCHF breaks above key resistance and its 2011 highs around 1.3200, from its double bottom lows at 1.2400. If sustained, could pave the way for 1.3500. GBPUSD resistance now elevates near 1.6350 and USDJPY is set to test the 85.90 trendline resistance from the 2007 highs at 124.00. By KM - AshrafLaidi.com Staff

US Roundup & Asia Preview. A drop in the ISM non-manufacturing index trumped a more hawkish tilt in the FOMC minutes in Tuesdays North American session. Following the service sector report, the dollar weakened, gold hit a record $1455 and silver neared $40. The pound was the top gainer on Tuesday while the yen lagged. U.S. stocks were flat for the second consecutive day. The pound surged as the UK service sector PMI jumped to a 13-month high of 57.1 from 52.6 (Exp: 52.9). GBP/JPY climbed more than 200 pips to above 138 and the pair has gained nearly 800 pips since March 28. The rates market is now pricing in a 10% chance of a BOE hike on Thursday. The U.S. service sector PMI headed in the other direction as the ISM non-manufacturing index fell to 57.3 from 59.7 (Exp: 59.5). The drop overshadowed the FOMC minutes where the main developments were: 1) the GDP forecast was revised down modestly due to higher oil prices 2) The FOMC appeared more divided as a few participants indicated that conditions might warrant less accommodative policy this year. 3) Similarly, a few members said it could be appropriate to scale back QE2. 4) Forecasts for inflation "shifted somewhat to the upside." 5) The overall stance of the FOMC was broadly unchanged.

THE ASIA PACIFIC SESSION features second-tier data in the form of Australian home loans (Exp: -2.6%) and Japans leading index (Exp: 104.2). The market will continue to digest Chinas rate hike and we may see some risk aversion on worries about slower global growth. The Bank of Japan begins its two-day meeting and policymakers are under pressure to take further action after injecting 37 trillion and doubling the size of its asset-purchase program to 10 trillion in the aftermath of the disaster. Further measures to boost liquidity (not likely), underwrite reconstruction bonds (very unlikely) or ease access to credit for affected companies/areas (likely) will weigh on JPY. On Tuesday, USD/JPY rallied to the highest since Sept. 23, 2010 and the daily RSI is at its highest levels since the pair peaked near 95.00 in April/May of 2010. EUR/JPY is at the highest in 11 months.

By AB - AshrafLaidi.com staff.

Tightening policy in China, attempts of restrictive fiscal policies in the US and another credit downgrade on Portugal do not stand in the way of the soaring markets as long as the risk trade is financed by a falling US dollar (courtesy of an immobile Fed) and a falling yen (courtesy of seasonal post-FY Jpns outflows). The 4th Chinese rate hike (3.25% lending rate and 6.31% borrowing rate) is understood to tackle further inflation gains, with a high profile 7.2% in food inflation. Neither did 9.99% on 10-year Portuguese yields could maintain a lasting dent on risk appetite. With USDJPY nearing the 85 yen level and USD weakness having the last word in a volatile intraday session, traders continue to see upside in EURJPY (120.70s) and an opportunity for 139 in GBPJPY (for those who are quick on the trigger in the event that BoE raise rates). Unlike the BoE, which does NOT publish a statement after the policy decision, the ECB will use the 30 mins press conference to explain its Thursday decision, which could be delivered in such a way to TEMPER anticipations of further rate hikes and rein in excessive EUR strength. AL

UK remains in focus today with this mornings release of UK March services PMI, expected at 52.6, unchanged from February. Given that both construction and manufacturing PMI data were down from February, todays services could well fall short. Since the services sector makes up over 70% of UK GDP, todays figure is to play a key role in Thursdays Bank of England interest rate. Accordingly, we could see GBPs upside relatively limited. Bear in mind that jus earlier, both German and Eurozone PMI did come in better than expected at 60.1 and 57.2, but failed to prevent EURUSD from holding above $1.42. EURGBP failed to take out the key 0.8850 resistance, now holding at the trend line support of 0.8780. GBPUSD resting on well above $1.61, but will need an upside data suprise to retest and break above 1.6180s, a break of which could call up 1.6230s. By KM- AshrafLaidi.com contributing staff

The main focus of the session will be the Reserve Bank of Australias rate decision. The market has minimal expectations built in for a change from the 4.75% Cash Rate. Possible AUD strength could come from comments about rising inflation or a strong labor market. Any change from: the Bank expects that inflation over the year ahead will continue to be consistent with the 23 per cent target would be a surprise and drive a sizeable AUD reaction. Negative AUD risks could stem from an attempt to highlight the dangers of a strong currency. The decision is at 0430 GMT.

USD/CAD fell to a 3-year low of 0.9615 early in London trading before creeping back to 0.9688. The market shrugged off a significant increase in inflation expectations in the BOCs Business Outlook Survey, attributing it to the spike in oil prices. The market continues to look for a hike around July.

By AB - AshrafLaidi.com contributing staff

Commodity FX remain hot ... Picking up where they left off last week, Australian and Canadian dollars continue to carve out new highs. AUD/USD tested a new multi-year high above $1.04 as USD/CAD extended its slide below C$0.9650 - new lows for the greenback against the loonie since late 2007. Both CAD and AUD will remain in focus on Monday. At 15:30 GMT (10:30am ET), the BANK OF CANADA releases its quarterly Business Outlook Survey. Last time, BOC saw businesses upbeat on sales growth, but also noted "inflation expectations are well anchored within the Banks range." Recall February Canadian core CPI missed on estimates but still registered a 4-month high at 0.2% m/m. A more hawkish outlook may begin to alter expectations for the conservative Canadian central bank - note the fixed income market is still pricing in below 10% chance of a rate hike at the next meeting. AUSTRALIA's ECON calendar is also busy. Consensus for the 2:30 am GMT Trade Balance sees a surplus of A$1.2B - this is well below January's A$1.9B and should further assess the impact of Dec-Jan floods on the mining industry. RBA rate decision is on tap 3 hours later at 4:30 am GMTon Tuesday. Overwhelming expectations see RBA standing pat at 4.75% - Gov Stevens may wait for late-April release of Australia's quarterly inflation data before altering RBA's perceivably neutral policy bias. Until then, we direct your attention to HSBC economists in Australian press highlighting steep wage growth in the mining industry in their assessment of the markets underestimating the pressure on RBA to resume raising rates.

US SIDE OF THE COIN is quiet on Monday in terms of economic data. Fed chief Bernanke to speak later in the day on clearinghouse regulations and Chicago Fed Pres Evans will discuss financial literacy - no mention of monetary policy expected release of FOMC meeting minutes on Tuesday looms as the next key US event. By GG. AshrafLaidi.com Staff.

Japan markets look to build on the gains of the past two weeks, with Nikkei 225 rising 1.8% last week and a whalloping 18% from its March 15th low. Global investors have shrugged increasing uncertainty surrounding Japan's fiscal state, cheering the weakness in the Yen as well as gradual resumption of production among the earthquake-impacted manufacturers. The rally should remain untrack until the latter half of April, when Tokyo earnings season kicks into high gear. In contrast, China markets ended last week marginally lower as anticipation of an impending PBoC rate hike permeates sentiment. First half of April is the likely range for another 25bp tightening of key 1-yr rates and would preserve the pattern of every-other-month policy moves (PBoC began adjustment in October and has since tightened in December and February). Weekly commitment of traders data from the CFTC saw speculators continue to add to their longs in risk-on currency majors. AUD is the most obvious beneficiary, with net longs at multi-year high levels. JPY net-long positioning fell off sharply to +7K contracts - a 5-week low.