Forex news from the European trading session - 3 January 2018
Economic data:
- US MBA mortgage applications w.e. 29 Dec +0.7% vs -4.9% prior
- UK Dec Markit construction PMI 52.2 vs 53.0 expected
- Brandenburg Dec CPI m/m +0.6% vs +0.4% prior
- SNB total sight deposits w.e. 29 Dec CHF 573.2bn vs CHF574.6bn prior
- Germany Dec unemployment change -29k vs -13k expected
- Switzerland Dec manufacturing PMI 65.2 vs 64.5 expected
- Spain Dec unemployment change -61.5k vs -58.7k expected
Central bank/Government:
- Beijing comments that it would be premature for UK to seek TPP pact
- Britain reported to be interested to join TPP deal after Brexit
- ECB's Hansson: Rationality has disappeared in cryptocurrency sector
- South Korea said to be waiting for a second phone call with North Korea later today
- South Korea central bank governor: We are closely watching FX market
Others:
- FX option expiries for the 10am NY cut - 3 Jan 2018
- Ripple becomes the second cryptocurrency to surpass $100 billion in market cap
- Bitcoin pares gains as prices fall below $15,000
- IMF sees a return to inflation in 2018
- The Brexit saga in 2018, what to expect from it?
Markets:
- AUD leads on the day, CHF lags behind
- European equities are higher on the day, buoyed by US and Asian equities' performance
- Gold is flat on the day at $1,317.31
- WTI crude is higher by 0.81% to $60.86
- US 10-year yields is down by 1 bps to 2.45%
- Bitcoin is up by 0.8% to $14,910
The start of the European session saw some light moves as ranges were tight among the major pairs. But the dollar caught a bit of a bid early on, and continued that way against the majority of currencies in the major bloc.
The EUR continued to slide further today after failing to break the 2017 highs against the USD in yesterday's trading. For me, this is the chart to watch out for if you're looking at EUR/USD.
Meanwhile, softer than expected UK construction PMI data gave enough of a reason for sellers to come in and drive the GBP lower. Trade talks concerning the TPP pact by the UK didn't add much optimism to the Brexit picture as well - and as more Brexit news come in, this could be a recurring theme once more for the sterling.
Swiss manufacturing PMI was solid (and the measure was higher than Germany's) but that won't detract from the fact that the SNB will continue on its easing path. So despite that, the CHF is the weakest currency on the day - dragged lower with the EUR.
USD/JPY hit session lows just moments ago, to 112.17 - but the trading range today has been relatively small, a mere 23 pips. The yen is higher against the dollar today as US 10-year yields are slipping a little (so are yields across Europe).
Onto the commodity bloc, the CAD and NZD are both slightly lower against the dollar. NZD/USD is still capped by resistance levels that I have pointed out earlier in the session. Meanwhile, AUD is the lead gainer on the day as an improvement in Aussie 10-year yields are helping to keep the AUD underpinned for now.
Oh, and Ripple became the second cryptocurrency after Bitcoin to surpass the $100 billion mark in terms of market capitalisation. That, and Bitcoin fell back below the $15,000 level after a reprieve earlier in the Asian session.
