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Writer's pictureStéphan

OPEC delay / Michel Barnier it is / The short #USDCNH / USD & risk breaking down ahead of NFP, crude has been driving FI lately.. Markets on high alert.. 25bp or 50bps ?


  • NFP : USD going into payrolls weak vs most pairs (interesting USDCNH story below, BoJ stays on the hawkish side too - add lower CROSSJPY's in the mix..), positioning is short USD/long bonds, so watch out if data is stronger (usual rules), and a HUGE risk in SOFR options, basically hedging for 50bps Fed cut in Sep, markets will price within seconds a 50bp cut, if data is well below 100K, watch out for revisions in previous months too

  • 30y UST 3.99% - lowest since Dec 2023

  • France : Michel Barnier it is … and he will need all of his considerable calm, patience and political skills to form a government and construct a budget that will get through the French Parliament, hepromises respect for 'all political parties'

  • On Monday : Chinese inflation data, APPL event wiht the iPhone 6 and THE first Harris / Trump debate

  • August private payrolls rose by 99,000, smallest gain since 2021 and far below estimates, ADP says, US ISM Services Index Aug: 51.5 (est 51.4; prev 51.4) - Prices Paid: 57.3 (prev 57.0). The all-important employment index remained in +ve territory at 50.2, only the third reading above 50 YTD, New Orders highest since May

  • BMW will launch its first hydrogen-powered model in 2028

  • This is big news : China announces that they'll "give all Least Developed Countries (LDCs) having diplomatic relations with China, including 33 countries in Africa, zero-tariff treatment for 100 percent tariff lines"

  • Politico: "Zelenskyy suffers huge backlash as reshuffle triggers power-grab accusations. A parliamentary majority and martial law mean the Ukrainian president has the right to assemble his government as he sees fit, but the opposition is crying foul."

  • Chinese banks have built a $100 billion short against the US dollar to prop up the yuan — and hedge funds are eager to get in on the trade #USDCNH

  • Interest expense on US Federal debt is now at a record $3 billion PER DAY. This is TRIPLE the amount paid 10 years ago and has DOUBLED in just 2.5 years

  • Germany is considering deporting migrants to Rwanda and using facilities there that were paid for by the UK

  • Gasoline crack spreads signal that the single most important petroleum product market in the world is weakening quickly #crude >> OPEC+ has reached an agreement to pause its planned oil output hike for Oct-Nov, according to a delegate familiar with the talks

  • The United States is close to providing Ukraine with JASSM long-range cruise missiles - US media

  • #Walgreens what not to do in finance : $7.5bn market cap, not a whole lot of cash, $33bn in debt...

 

Whaoo - At the center of it all are transactions known as FX swaps. These have quietly become a key tool for state-run Chinese banks seeking to prop up the yuan during periods of outsized selling pressure.




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Apparently..











USD is weak(er) overall, showing a few signs of breaking down vs a few pairs, add soft CROSSJPY's too in the mix still..



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