Forex headlines for the European morning session 5 Dec 2016

News:

  • UK Supreme Court to begin its deliberations on Brexit today
  • UK Supreme Court president says the appeal will be judged on points of law not politics
  • UK court on Brexit: Wider political Brexit questions not subject of this appeal
  • Crisis, what crisis? Euro in rampant recovery mode
  • EURUSD shrugs off the Italian referendum
  • EU's Katainen expresses concern over Italian referendum result
  • There's been no impact on FX from Italian vote says ECB's Nowotny
  • OPEC's Barkindo says they expect to achieve equilibrium price
  • French PM Valls will stand for President in next year's elections
  • Indian PMI data shows a sharp downturn in November
  • Option expiries for the 10 am NY cut today 5 Dec
  • Nikkei 225 closes down -0.82% at 18,724.99

Data:

  • November 2016 UK Markit/CIPS services PMI 55.2 vs 54.0 exp
  • Eurozone Markit services PMI Nov final 53.8 vs 54.1 exp
  • Germany Markit/BME services Nov PMI final 55.1 vs 55.0 exp
  • France Markit services PMI Nov final 51.6 vs 52.6 exp
  • Italy Markit/ADACI services PMI Nov 53.3 vs 51.6 exp
  • October 2016 Eurozone retails sales 1.1% vs 0.8% exp m/m
  • December 2016 Eurozone Sentix index 10.0 vs 13.1 exp
  • Spain Markit services PMI Nov 55.1 vs 55.0 exp
  • Spain industrial output Oct yy NSA -2.2% vs +1.1% prev
  • Russia services Nov PMI 54.7 vs 52.7 prev

It's been a busy start to the week as the euro tumble in Asia on the Italian referendum result was rapidly reversed as European markets took a more positive stance.

Strong showings by European equities have led to a general risk-on sentiment which has seen oil also rally with the yen and swiss franc on the back foot.

EURUSD has rallied strongly from 1.0506 Asian lows to post 1.0730, EURGBP from 0.8305 to 0.8437 and EURJPY from 118.70 to 122.53 before running out of steam with large option expiries at 1.0700 helping to limit further gains.

USDJPY has been up to look at 114.50 after 112.86 seen in Asia while USDCHF has been back to look at 1.0180-200 only to give up again and retreat below 1.0100. Fingers being pointed at the SNB again as EURCHF began its rally from 1.0700 before the euro rebound began in earnest.

AUDUSD has had a decent session by and large but gains vs NZD ( post PM Key's surprise decision to stand down) and USD have been negated by EURUSD demand. USDCAD was under the cosh to test 1.3280 as oil rallied but those moves have since seen a degree of reversal as traders take some money off the table.

US data and CB talking heads to come should keep markets ticking over nicely.