Global Markets:

  • Chinese PPI (y/y): -2.3%, Expected: -2.2%, Previous: -2.0%
  • Chinese CPI (m/m): -0.5%, Expected: -0.5%, Previous: 0.5%
  • Chinese CPI (y/y): 2.4 %, Expected: 2.5 %, Previous: 2.0 %
  • Asian markets are lower as of 05:00 GMT
  • The Nikkei dropped 2.20 % while both the Shanghai Composite and Hang Seng lost 0.60 % on the day
  • Gold at $1320 (unch), Silver at $20.02 (-0.30 %), Crude Oil at $103.16 (-0.20 %)
  • US 10 year yield at 2.65

FX Flows/Orders:

  • AUD/USD – bit of a squeeze overnight, with the pair dropping to 0.9360. Talk of solid bids 0.9320/30; topside, offers at 0.9420 and then in better size ahead of the 0.95 barrier option.
  • EUR/USD – trading just a few pips shy of the 1.39 level, ahead of the German CPI release. Bids building at 1.3840/50, while topside not much resistance until 1.3970-80.
  • GBP/USD – initial support at 1.6720, with the 1.6680 level now key to sustain short-term upside momentum. Larger offers ahead of the 1.6820 level, while stops are building above.
  • USD/JPY – good demand on the dip towards 101.30 led to a bounce to 101.70 overnight. Bids remain large 101.20-30 and offers are lined up at the 102.20 level.

Market Sentiment:

It’s risk-off in the markets: The S&P 500 closed 2 % lower, while the NASDAQ fell 3 %. Asian markets have picked up the negative sentiment with all major indices in the red. Where the Euro will go from here for today will largely depend on the German CPI release at 07:00 GMT, with the econ calendar light for the rest of the day. Commodity currencies, the outperformers the past few trading days, have come slightly under pressure and it will be interesting to see if they will remain bid now as the risk-off bias is increasing. In AUD/USD, key short-term support lies at 0.9330, but a close below the 0.92 level would be needed for technicals to turn bearish again.

Upcoming Events:

  • 07:00 GMT – German CPI (0.3 % MoM, 1.0 % YoY)
  • 08:00 GMT – Spanish CPI (0.2 % MoM, -0.2 % YoY)
  • 13:30 GMT – US PPI (0.1 % MoM, 1.2 % YoY)
  • 14:55 GMT – US Michigan Consumer Sentiment (81.0)
  • 14:55 GMT – US Michigan Consumer Expectations (71.4)