G10 FX Daily Report - 22nd July 2026. Wed Jul 22 2026

Research evidence excerpt

G10 FX Daily Report - 22nd July 2026. Wed Jul 22 2026

funded (energy)

tax cut while the headlines overnight focus on Burnham (and the new Defence Minister

Streeting) pushing back on Healey’s well known defence spending plans (3% of GDP by 2030

and issuance of war bonds). We still have not really had anything I would call acutely worrying

but we come from a recent place of peak Burnham with stretched flows and techs, I think

sterling can remain soft going forward especially as gilts get hit with the continuing oil

advances, keeping EURGBP length here looking for a move back towards 0.86 resistance. Just

like the LFS, there was little in the CPI report that will influence the MPC next week, net flows

yesterday were pretty modest but did exhibit DHF GBP selling (1z). Levels remain familiar;

0.8470/0.86 in the cross, 1.3325/ 1.3550 for cable.

JPY Soft day for JPY with significant SHF selling (3z) helping the currency make fresh 40 year lows

against the USD (163.24) alongside a very heavy fixed income complex. The persistence of the

move above 163 saw us reduce our cash down as promised and now that we have seen the BoJ

headlines *BOJ IS SAID OPEN TO RAISING RATES FASTER THAN EVERY SIX

MONTHS are we adding back? Not really, it does not make much of a difference to the picture

truth be told (Dec BoJ pricing moved 2bp to 27bp) – it is all about official intentions at this

point and Katayama remained pretty straight faced overnight in response to reporters overnight,

Mimura once again said nothing. I still believe in the signal they are sending the difficult

question here is timing and how much patience they have with a market ignoring them. Still

short USDJPY here but reduced to a core that is mostly via options.