A very well contained session through London

Events over the last 24 hours sparked off some decent activity in the CAD rates, with OPEC members agreeing on an output cut which pushed Oil prices higher but modestly so.  WTI gains past $47.00pb were likely behind the support in the USD/CAD rate, which found some support around 1.3050. The recovery has petered out ahead of 1.3125, with the pair well positioned for another test on the downside; 1.3000 the immediate target lower down.  Plenty of EU data out this morning as the regional German inflation figures are creeping higher. National CPI marginally better than expected as a result, but HICP as expected at +0.5%. German unemployment rose slightly while the EU-wide sentiment indices improved slightly. None of this had any impact at the time, with the slightly higher than expected (final) Q2 GDP reading in the US seeing 1.1200 tested, but we were pushing back towards 1.1235-40 into the London close. The much lower than expected US pending home sales may have prompted this to some degree (fell 2.4% in Aug). USD/JPY gains showed some promise after taking out a range of sell orders and stops through 101.00, but ran into fresh sell orders ahead of 102.00 to limit gains for now. US equities edging higher to give some modest support with the AUD also buoyant despite the overnight rejection of .7700. For GBP, we continue to see attempts of a recovery, but EUR/GBP is showing its familiar resilience on the downside. We ran into support below .8500 earlier in the week, but pre .8600 bids are now supporting. Cable is also testing lower, but strong bids below 1.3000 absorbing the bids for now. UK Q2 GDP tomorrow, and this could spark some volatility, though it is also worth noting the EU rebate flow which may impact on EUR/GBP – the cross rate capped ahead of .8650 at present.