JPM G10 FX

EUR The day-to-day is becoming increasingly tedious, with volumes fading and it getting harder to construct a convincing narrative for every small move. That is probably no surprise now that the conflict has dragged on, peak optimism appears to have been reached last week, and the majors are slipping back into ranges. With clearer guidance that an “extension” to the deadline effectively means another 3–5 days, patience still feels like the right stance. The IRGC is plainly making it harder for Trump to walk away with a clean “win”, so the real question is whether the backdrop looks worse again in a week’s time.

Position-wise, I am still close to home. I remain long EUR via topside only, and for now I am content to leave that parked. I am also still short EURHUF, and have been adding back small pieces that I bought back last week as spot has been dragged higher by geopolitics. Beyond that, I am not prepared to commit much more in the current environment. The euro underperformed yesterday without much in the way of fresh news. We all know the broad narrative — weaker growth dynamics and higher energy prices — and while last week that did not seem to matter much, the reality is that investors still like to use the euro as a funding currency. When momentum fades or the real-money bid steps back, that dynamic can quickly reassert itself. Timing that day to day is difficult, but I do wonder whether today’s PMIs could keep some of that pressure in place given the early tone does not look especially encouraging. That said, asking for two days of exactly the same price action may be too much. Key technical levels remain the cluster of moving averages around 1.1660 (50-day), 1.1676 (200-day), and 1.1708 (100-day).

GBP There are effectively no real deadlines left, and the Iran story is starting to look endless. Iran has very little incentive to stop inflicting pain on the West, while the problem for markets is that Trump and the US are not feeling the economic pressure nearly as acutely as many other economies. So while acute escalation may be off the table for now, this kind of stalemate will increasingly create anxiety if oil continues to grind higher. That leaves the majors stuck in a kind of purgatory. I still think USD should eventually resolve lower, but it is impossible to know how long this uncomfortable consolidation phase lasts.

On the UK side, pressure on Starmer has not eased, although sterling itself has held up reasonably well. My sense is that EURGBP was more a victim of euro-cross weakness yesterday, but the break of short-term support at 0.8680 did prompt me to trim a little. Headlines that McSweeney will face questions from the Foreign Affairs Committee next week, combined with continued press reports of Labour MPs distancing themselves from Starmer, should keep the political issue alive into local elections in two weeks. Timing this trade remains difficult because the market has very little conviction or follow-through, but I would look at some topside in crosses over the next week or so. In flows, DHFs were better sterling buyers yesterday after having been better sellers in 8 of the prior 9 sessions, though that was offset by real-money and short hedge-fund supply. Overall, the flow picture remains mixed. My bearish sterling view is unchanged. 1.3475/80 has held well in Cable over the past week, so if 09:30 PMIs are soft, I would be biased to trade a break lower.

JPY The yen remains on the back foot as higher oil offers no help and there is still nothing useful coming from the BoJ. It has been painfully slow progress, but we are drifting back up toward another test of 160 in USDJPY. The broader dynamic still feels intact: stable risk, demand for carry and firmer oil. In theory, that should keep pressure on the yen and perhaps eventually force some reaction from the MoF — though that may be wishful thinking. Offshore real-money selling of JPY continued yesterday. With PMIs and US claims still to come later, I have no strong JPY bias here.

CHF Softer services PMI prints from France and Germany this morning have pushed EURCHF a little lower, but ultimately the franc remains a secondary expression of the broader Iran / US headline cycle. The Dollar retains a firmer tone as the situation continues to look unresolved, which has pulled USDCHF well off the 0.78 support area and helped cap downside in EURCHF. I still hold some tactical CHFJPY shorts, looking for a move back toward 200/201, but beyond that I am struggling to find much inspiration while this geopolitical saga drags on. In flows, real money has now sold CHF for five consecutive sessions, while hedge funds and systematics remain mixed.

AUD / NZD / SEK / NOK I did say yesterday that NOKSEK could continue higher, although with little else moving the magnitude of the move was still notable. Real money was a buyer of NOK with us yesterday and a seller of SEK, which helped support the cross. The core rationale still holds — relative terms of trade and central-bank divergence — and with more Swedish hard data due next week, parity is starting to look like a realistic medium-term target if the data continue to disappoint. The main caution is obvious: if there is any genuinely positive resolution in the US-Iran conflict over the next few days — and the White House’s “indefinitely” now appears to mean something more like 3–5 days — then energy prices will likely fall and NOK will come under pressure. But as I have said repeatedly, I would use that weakness to buy or add to NOK longs.

EURAUD moved lower yesterday on stronger equities, while euro crosses more broadly also came under pressure after Germany growth downgrades. I remain short EURAUD. Short-term trendline resistance comes in around 1.6450/60, and a move above there would be disappointing at this stage. The expected short hedge-fund demand for NZD has not really shown up, which suggests AUDNZD can continue to grind higher on yield divergence and the differing energy backdrop. No change in view: I remain long NOK and AUD, with the latter primarily expressed against EUR. Overnight Australian PMIs saw both manufacturing and services move back above 50, which is encouraging, and this morning’s European releases could add a little more support to that view.

CAD It remains difficult to say anything especially new or meaningful here, with broader risk and sentiment still being driven by uncertainty over the US-Iran path. Today’s PMIs may help a little, but my base case is still that risk drifts lower until there is some genuinely constructive geopolitical news. I am running a small long USDCAD position, mainly as an offset against some higher-beta Dollar shorts elsewhere. It is worth noting, however, that yesterday’s flow was mostly driven by systematic demand for CAD.