Forex news from the European trading session - 11 January 2018
Economic data:
- Eurozone November industrial production m/m +1.0% vs +0.8% expected
- Germany Q4 GDP estimated at +0.5% q/q
- Italy November retail sales m/m +1.1% vs -1.0% prior
- Germany 2017 NSA GDP y/y +2.2% vs +2.3% expected
- Spain November industrial production y/y +4.2% vs +3.1% expected
- Bank of France Dec industry sentiment indicator 110 vs 107 expected
- Japan November leading indicator index 108.6 vs 108.6 expected
Central banks/Government:
- Ifo chief economist: No end in sight for Germany's economy boom
- Ossig: ECB musn't make hasty policy turnaround
- UK PM spokesman: We will not be holding a second referendum on Brexit
- Merkel: There are still big hurdles to clear before a coalition can be formed
- South Korea says banning of cryptocurrency market not finalised yet
- German SPD's Schulz: Coalition talks today focused on EU
- Germany's CSU party seeks split from ECB monetary policy
Others:
- FX option expiries for tomorrow's cut (Friday, 12 Jan 2018)
- FX option expiries for the 10am NY cut - 11 Jan 2018
- WTI crude touches $64 per barrel for the first time since December 2014
- Another sign that UK consumers are struggling with inflation rise
- ANZ: China will "naturally" slow US Treasury purchases amid less FX intervention
- Whispers of oil heading to $80 are growing louder
- Nomura: USD/JPY rebound to 200-day MA may see gains to mid-112 levels
- UAE's oil minister: OPEC committed to keeping cuts for the rest of the year
- Bitcoin may be down but it's not out just yet
- Nikkei 225 closes lower by 0.33% at 23,710.43
Markets:
- AUD leads on the day, GBP lags behind
- European equities turn the corner and are mostly higher so far
- Gold is up 0.15% to $1,318.88
- WTI crude is up by 0.68% to $64.00
- US 10-year yields is down 1.8 bps to 2.538%
- Bitcoin is down 5.5% to $13,700
The trading session started with the dollar recouping some losses following China's retraction of the comments made yesterday about curtailing purchases of US debt. They mentioned today that yesterday's comments were based on "wrong information".
The dollar then posted steady gains against the major currencies (except the aussie), only to give back those gains a couple of hours later. But now, we're seeing a bit of moves but it's mostly a decline in sterling and the loonie - as GBP/USD falls below support levels that I highlighted earlier here.
The AUD is the lead gainer on the day following a beat in retail sales data earlier in Asian trading, and has held onto gains from there. The NZD is close behind as NZD/USD extends gains above the resistance level (61.8 retracement level) it broke through yesterday:
The euro and swissie traded sideways with good two-way action against the dollar, while the Japanese yen is weaker on the day as it retraces gains posted from the last two days following the BOJ announcement to "taper" bond purchases.
Meanwhile, the CAD encountered some weakness mid-way through the session but USD/CAD ran into key resistance levels and retreated thereafter. The pair has been settling around the 1.2560-70 range since then.
The sterling has had a tough day as the shadow of Brexit talks continue to weigh in on the currency. I've also mentioned here that the consumer rhetoric is another one to watch out, and that could add to more worries in the GBP outlook moving forward. Cable fell below 1.3500 early in the session and fell below support levels that I mentioned here. The low of the day was 1.3458.
In other markets, Bitcoin continues to be plagued by news that South Korea is cracking down against cryptocurrency exchanges. It fell below $13,000 earlier in the day but has bounced back a little since.
And in commodity markets, we saw crude oil hit above $64 for the first time since December, while the January gold trade is still pretty much looking good but encountering a little bit of a resistance pocket.
