Global Markets: 

  • Asian stock markets: Nikkei is down 2.30 %, Hang seng dropped 0.60 %, Shanghai Composite gained 0.55 %, ASX rose 0.10 %
  • Commodities: Gold at $1240 (-0.40 %), Silver at $17.45 (-0.10 %), Crude Oil at $80.71 (-1.30 %), Brent Oil at $83.28 (-0.75 %)
  • Rates: US 10 year yield at 2.084, German 10 year yield at 0.756, UK 10 year yield at 1.936 

News & Data: 

  • Australia MI Inflation Expectations 3.4 %, Previous: 3.5 %
  • China FDI -1.4 %, Previous: -1.8 %
  • BOJ’s Iwata: implementing policy to reach 2% within about 2 years, BOJ’s easing is succeeding
  • BOJ’s Kuroda: Weak Yen, weak commodities have recently offset each other 

FX Overview: 

Asian stock markets are mixed with the Nikkei down more than 2 %, but the Shanghai Comp and ASX slightly in the green. Gold and Silver bounced on the USD weakness, but Crude Oil is still heavy and seems to be heading for another test of the $80.00 level. Overall, markets remain nervous after yesterday’s surprising moves. While Retail Sales and PPI figures did disappoint, it was a pure sentiment-driven move as uncertainty has built up with time. Not much has changed since a few weeks ago when everyone was an USD bull, but it seems we’ll see more of the choppy price action in the near-term.

In FX, we saw slight USD strength in the Asian session, but flows were light overall. EUR/USD hit a high of 1.2843 and eventually retraced to 1.2805. Bids reported at 1.2780 with key intraday support at 1.2740. To the topside, light stops reported through 1.2860, in better size above 1.2880, which remains the key intraday tech resistance level.

USD/JPY consolidated in a 105.80-106.20 range overnight. Bids from Japanese names noted at 105.70 and key support at 105.20 (yesterday’s low). GBP/USD has come under pressure after dovish comments from BoE’s Weale, who is usually known as a hawk in the MPC. EUR/GBP has broken above the 0.80 level and it seems we could see a squeeze towards the 0.8140/50 area before the downtrend continues. 

Upcoming Events: 

  • 09:00 GMT – Euro Zone CPI (0.4 % MoM, 0.3 % YoY)
  • 09:00 GMT – Euro Zone Core CPI (0.7 % YoY)
  • 09:00 GMT – Euro Zone Trade Balance (€13.5bln)
  • 12:30 GMT – US Initial Jobless Claims (290k)
  • 12:30 GMT – Canadian Manufacturing Sales (-1.6 % MoM)
  • 13:15 GMT – US Industrial Production (0.4 % MoM)
  • 13:15 GMT – US Manufacturing Production (0.3 % MoM)
  • 14:00 GMT – Philadelphia Fed Manufactruring Index (19.9)