AUDUSD’s negative momentum remains strong, the 0.7500 area vulnerable to giving way. All eyes will be on the US payrolls data tonight, markets believing it would take a major disappointment to dent the likelihood of a Fed hike on 15 Dec.
AUDUSD in the medium term perspectives: Lower to 0.7400. The Fed’s assertive tightening bias plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that coal and iron ore are likely to sustain a good portion of their dramatic rises, and economic data for Q4 and Q1 should improve, but these forces are subservient to the US dollar’s trend. Australia’s AAA rating will remain an issue into the May budget.
See bearish AUDUSD below 0.73 if:
1) The labor market weakens forcing the RBA to respond more aggressively to weak inflation;
2) The Fed responds to animal spirits and bullish survey data by delivering a faster pace of hikes than currently expected;
3) Trade tensions and capital outflows force genuine CNY devaluation.
Accordingly, OTC hedging arrangements for downside risks seems intact, you could make this out from the above nutshell evidencing risk reversals, while IVs are spiking higher which is in tandem with the above mentioned underlying forecasts and its rationale.
Please be informed that the nutshell showing negative risk reversals are bids for the hedging for the downside risks, as a result, puts are on more demands over calls. The negative risk reversals across all tenors are indicating the bearish hedging interests.


BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan
Urban studies: Doing research when every city is different
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook
Global Markets React to Strong U.S. Jobs Data and Rising Yields
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential
Wall Street Analysts Weigh in on Latest NFP Data
U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 



