FX markets are gaining momentum after a quieter morning than usual. Flows are up 23% from Monday (+23% vs 5-day average) amidst a conflict of opinion concerning the Omicron variant. USDJPY remains the most traded currency - heavily outshining EURUSD - as it continues its downward trend, breaking below the 113 level and now bouncing back a bit higher.
In EURUSD. Despite the grind lower, clients have taken on a net buying position which has largely been driven by retail names 1m vols have elevated from lows of 7.60 in the early morning to a sizable 8.4 now, presumably caused by a flurry of Omicron news. EURNOK has spiked from 10.24 to 10.28 on news from Norges Bank that it won't buy NOK for the remainder of the year. Elsewhere, there have been selloffs in EURUSD and GBPUSD, but the rest of âŹ10 appears fairly balanced.
Very quiet on the EM front Tuesday, with USDSGD remaining the standout flow with a net buying bias from clients. Polish CPI came in higher at 7.7% Y/Y, above the 7.3% survey which has led 1m vols from 10.9 Tuesday morning to 11.2 at noon, but volume from clients has nevertheless been very sparse.
Via UBS
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