Global Markets:

  • Asian stock markets: Nikkei up 1.80 %, Shanghai Composite gained 0.70 %, Hang Seng rose 02.0 %, ASX declined 0.60 %
  • Commodities: Gold at $1159 (+0.65 %), Silver at $15.62 (+0.70 %), WTI Oil at $47.20 (+0.30 %), Brent Oil at $57.25 (+0.30 %)
  • Rates: US 10 year yield at 2.125, UK 10 year yield at 1.764, German 10 year yield at 0.251

News & Data:

  • Japan Industrial Production 3.7 %, Expected: 4.0 %, Previous: 4.0 %
  • Japan Capacity Utilization 3.6 %, Previous: 2.0 %
  • New Zealand Business PMI 55.9, Previous: 50.7
  • Nikkei 225 hits a fresh 15 year high

Markets Update:

EUR/USD had a bit of a bounce yesterday after worse than expected US retail sales. However, the pair failed to sustain momentum above 1.0680 and is now back sub-1.06. Dealers report that decent selling interest lies between 1.07 and 1.0730. While there is a good chance of some position covering ahead of the weekend, we will need to see a clear break & daily close above that area to trigger a larger short squeeze. Meanwhile, GBP/USD is under increased pressure and is now trading within the key support area at 1.4800-40. A test of the 2013 low at 1.48 is just a matter of time. EUR/GBP benefited from the GBP weakness and extended gains towards 0.7145 overnight.

USD/JPY is still surprisingly quiet. The pair fell to a low of 120.80 after the bad US econ data, but demand from leveraged funds led to a quick rebound. In the APAC session, USD/JPY traded within a 121.25-55 range. Techs suggest further gains are ahead and 121.90/122.00 are the next bull targets. NZD/USD had an impressive rally in the past 36 hours, but ran into decent resistance in the 0.7415-30 area. Offers pre-0.7450 capped the topside for now and the pivotal short-term support level now lies at 0.7320.

Looking ahead, we don’t have many data releases in the EU session, but it should get more volatile in the NY session, with US PPI data and Canadian employment numbers.

Upcoming Events:

  • 07:00 GMT – German WPI (-0.2 % m/m)
  • 09:00 GMT – Italian CPI (0.3 % m/m, -0.2 % y/y)
  • 09:00 GMT – Italian HICP (0.3 % m/m, 0.1 % y/y)
  • 12:30 GMT – US PPI (0.3 % m/m, 0.0 % y/y)
  • 12:30 GMT – US Core PPI (0.1 % m/m, 1.6 % y/y)
  • 12:30 GMT – Canadian Employment Change (-5.0k)
  • 12:30 GMT – Canadian Unemployment Rate (7.0 %)
  • 14:00 GMT – US Michigan Consumer Sentiment (95.5)
  • 14:00 GMT – US Michigan Consumer Expectations (87.5)