• Moyes dismissal stuns market
• US home sales data due today
• Market lull as global PMI day looms
Welcome back from the Easter break to... more of the same really. In short, the market is stunned by the dismissal of David Moyes as Manchester United manager and little else. Nothing and I repeat, nothing, is happening in this market. Of course, we have global PMI day tomorrow and perhaps that will lighten some enthusiasm in this market in the near-term, but in truth it’s hard to envisage. More and more, this market is all about two or three days worth of volatility and you’re either on the right side of that move and happy or you’re not, and are spending the rest of the month trying to unwind the position in catatonic markets.
Data on the day today will be light and will come in the form of US existing home sales as well as European consumer confidence. Neither is likely to really move the market as parents and traders are more concerned about how to keep their children busy during the remainder of the school holidays. Equity earnings reports are in full swing and thus far have given the US indices a small leg up. Reports so far have been less than flattering but have done the job. However, FX is not taking any sort of lead from any of this and is instead just meandering.
For what it’s worth, I still like being long of AUDUSD, EURUSD (cautiously) and Cable. On Cable, chatter of RHS M&A demand for Cable as well as BoE minutes tomorrow (with hawkish expectations) are giving an underlying boost to the currency. I am still looking for a print of 1.7000 but once achieved the reversal road lower could prove to be a rather ugly one. And, of course, the USDJPY. With news of a reshuffle of the GPIF investment committee comes renewed enthusiasm about more Nikkei rallies and subsequent sales of the JPY against anything and everything. I’m not convinced, and if you can take the GBPJPY noise out of the picture then you’re likely to get a clearer view of why I’d like to be short USDJPY and/or long JPY in general.
Helmets on and good luck out there today.
Ken Veksler is the director and chief investment officer of Accumen Management, a London-based boutique asset management and foreign exchange consultancy.