Market a mess ahead of the TLTRO take-up

<p>I’ll keep it short and sweet today, as the theme remains the same ahead of this week’s main events: the take-up in the TLTRO and […]</p>

I’ll keep it short and sweet today, as the theme remains the same ahead of this week’s main events: the take-up in the TLTRO and US retail sales. It’s getting very difficult to remain a dollar bull as the consolidation theme continues as we move further towards the profit-taking year-end trend and capital preservation as liquidity comes at a premium. The market remains in a risk-averse mode as the further decline in oil prices push equities to their biggest losses in eight weeks.

In Asia the NZD saw solid gains as the RBNZ surprised the FX community by saying that further rate hikes are to be expected. Governor Wheeler tried to contradict the statement by expressing surprise that the market had interpreted the statement as a tightening signal. The AUD also jumped on a robust employment report that saw a headline change at 42.7k versus the 15.0k consensus. The unemployment rate remained unchanged at 6.3% as the participation rate increased to 64.7%.

The consensus for TLTRO ranges between EUR 60 to 250 billion, with the average around EUR 130 billion. The take-up in September was underwhelming at EUR 83 bn, and there’s just over EUR 250 bn in LTROs to be repaid over the coming months. The market believes the take-up will be lower and a number below EUR 100 billion to weigh on the EUR.

 

EUR/USD

Supports 1.2400-1.2340-1.2245  | Resistance 1.2500-1.2530-1.2600

 

 

USD/JPY

Supports 117.25-116.95-116.60   Resistance 119.00-119.30-120.00

 

 

GBP/USD

Supports 1.5640-1.5625-1.5590  Resistance  1.5760-1.5800-1.5830

 

 

 

 

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