Global Markets:

  • Asian stock markets: Nikkei up 0.50 %, Shanghai Composite gained 0.40 %, Hang Seng and ASX both rose 0.70 %
  • Commodities: Gold at $1228 (-0.50 %), Silver at $17.28 (-0.70 %), Crude Oil at $82.15 (+0.40 %)
  • Rates: US 10 year yield at 2.208, German 10 year yield at 0.836, UK 10 year yield at 2.113

News & Data:

  • Australia Westpac Consumer Sentiment 0.9 %, Previous: -4.6 %
  • China CPI 0.5 % MoM, 1.6 % YoY – Expected: 0.4 % MoM, 1.7 % YoY, Previous: 0.2 %, 2.0 %
  • China PPI -1.8 %, Expected: -1.6 %, Previous: -1.2 %

FX Overview:

Asian stock markets are higher on the day despite rather sour market sentiment in general. Commodities are under pressure once again and Crude Oil posted the biggest daily loss in 2 years yesterday. The WTI contract declined from $85.50 in the early London session to $81.30 and closed almost 5 % lower on the day. Meanwhile, Gold and Silver dropped as well as the USD regained some strength. The focus today will be on UK employment data and US retail sales/PPI figures.

AUD/USD fell to a low of 0.8675 after weaker than expected Chinese CPI and PPI data, but ran into demand from Asian sovereign names. The pair bounced from there and reached a session high of 0.8720. Dealers note that there are bids from the same Sov name towards 0.8660 and stops in good size through 0.8640. To the topside, offers noted at 0.8740/50.

Loonie got hit hard by the drop in Oil prices. USD/CAD broke above the 1.13 level without facing much resistance and extended gains overnight, reaching a high of 1.1340. Flows were decent and buying led by leveraged names. Order book is said to be light until 1.1280, where better bids are expected to appear. To the topside, the charts suggest there is not much resistance until 1.15. In NZD/USD, trendline support on the hourlies held and the pair bounced to 0.7830. Further range trading likely in the near-term with 0.77 and 0.80 the key levels.

USD/JPY was bid overnight, supported by gains in the equity markets. Intraday support at 106.80 and 106.65, with the next key tech level being 105.50. To the topside, offers at 107.50 and in solid size pre-108.00. In EUR/USD, there is talk of larger stops through 1.2585/90 and bids from 1.2580 to 1.2570.

Upcoming Events:

  • 06:00 GMT – German CPI (0.0 % MoM, 0.8 % YoY)
  • 08:30 GMT – UK Claimant Count Changes (-35.0k)
  • 08:30 GMT – UK Unemployment Rate (6.1 %)
  • 08:30 GMT – UK Average Earnings Ex Bonus (0.8 %)
  • 12:30 GMT – US Core PPI (0.1 % MoM, 1.8 % YoY)
  • 12:30 GMT – US PPI (0.1 % MoM, 1.8 % YoY)
  • 12:30 GMT – US Core Retail Sales (0.3 % MoM)
  • 12:30 GMT – US Retail Sales (-0.1 % MoM)
  • 12:30 GMT – US NY Empire State Manufacturing Index (20.80)
  • 18:00 GMT – US Beige Book