Forex trading headlines from the European morning session 1st October
- RBA leaves interest rates on hold at 2.5%
- RBA says monetary policy is appropriate
- RBA statement in full
- Japan’s Abe goes ahead with sales tax hike to 8% from 5%
- Abe says sales tax package designed to combine economic growth an fiscal reform
- Japan’s Aso says no plan to change size of economic package
- Japan’s Amari says stimulus aimed at cushioning sales tax hike
- UK Markit mftg PMI sept 56.7 vs 57.3 exp 57.2 prev
- German Markit mftg PMI sept 51.1 vs 51.3 exp /prev
- German unemployment change sept +25k vs -5k exp
- EZ Markit mftg PMI sept 51.1 as exp/prev
- EZ unemployment august 12% vs 12.1% exp 12% prev
- BOE FPC announces bank stress tests
- BOE’s Tucker says regular bank stress tests will improve confidence in sector
- Italian unemployment rate sept +12.2% vs +12.00% exp +12.1% prev
- Spanish Markit mftg PMI sept 50.7 vs 51.1 prev
- Swiss PMI sept 55.3 vs 54.6 prev
- Italian Markit mftg PMI aug 50.8 vs 51.0 exp 51.3 prev
- French Markit mftg PMI sept 49.8 vs 49.5 exp/prev
- Bundesbank’s Dombret says preferential treatment for sov bonds should end
- Nikkei closes up 0.2% at 14,484.72
A busy session from the off that has had my little typing fingers returning to the ice bucket on frequent occasion!
With the official US govt shut-down, RBA keeping rates on hold and Abe leaking his decision to hike sales tax to 8% we were still only 45 minutes into the session, and we didn’t pause for breath for a good while after that.
USD was sold again on the official shut-down news with GBPUSD testing 1.6250 , EURUSD 1.3575 , USD JPY 98.20 and USDCHF 0.9010. Then the aussie $ had its own brief moment in the spotlight post-RBA with AUDUSD eventually climbing back above 0.9400 and AUDJPY making solid gains before the Abe sales tax confo drove yen pairs lower.
The overall USD bearish tone has prevailed albeit to lesser or greater degree but it’s not been a clear picture by any means. USDJPY has been down to 97.63 and is still hovering close by but EURUSD has fallen back to 1.3534 after failing to penetrate strong sell interest into 1.3600. Talk of a large option expiry at 1.3590 will come back into play closer to the time. Similarly cable has retreated from 1.6261 to 1.6221.
USDCHF smashed lower through 18 month lows at 0.9012 to post 0.8992 but has since rallied strongly to 0.9047 dragging EURCHF back up with it to 1.2250. USDCAD fell to 1.0287 but has spent most of the session pinned around 1.0300.
Plenty going out there still but conditions remain somewhat fragile. Approach with caution.