Introduction
Raw material prices such as copper, aluminium and nickel are higher as the BCOM index rebounds back towards the 84.0 level. There has been further indications of price consolidation across markets, as WTI crude oil futures moved back lower by a touch and USD also weakened. Asian equities are largely positive bar those in Hong Kong with the MCSI APAC index higher too. The market will focus on Sterling this morning with industrial production data released out of London and will also look to find a consistent sentiment in Europe and NY after the risk-on mood tended to wane in NY yesterday.
Asian Session
The RBNZ released its financial stability report yesterday upon the open in New Zealand. The market expected firm steps to intervene in the housing market but these were not taken, indicating a little more ease regarding this sector from the central bank and pushing NZD higher.
Moody’s rating agency may have weighed on AUD a touch in announcing that four large banks in Australia would be likely to experience earnings slowdowns in the second half of this year. AUD/USD and AUD/NZD trade at .7361 and 1.0823 respectively right now. Westpac consumer confidence info. printed positively yesterday, coming in at 103.2 compared to 95.1 previously.
JPY has lost 2% over the last two days but still stands far away from the 29th Jan 2016 high of 121.69. The pair today has traded around an approx. 80-pip range on the 109.0 pivot.
The day ahead in Europe and NY
Sterling trades at 1.4431 versus USD and .7888 against the euro ahead of manufacturing and industrial production info. that is set to be released at 09:30 BST today. Both the MoM and YoY industrial production figures are set to rise with manufacturing production data se to prove mixed. The NIESR will also release its GDP estimate for the UK at 15:00 BST today.
A sparse day of data in the states takes place today, with mortgage application info released at midday BST. The EIA will release details of crude oil stocks at 15:30 BST whilst the monthly budget statement will be released at 19:00 BSt.
Spot
Last | % since US Close | High | Low | |
EURUSD | 1.1396 | +0.20% | 1.1396 | 1.1369 |
USDJPY | 108.56 | +0.64% | 109.38 | 108.56 |
GBPUSD | 1.4431 | -0.06% | 1.4467 | 1.4423 |
AUDUSD | .7361 | -0.10% | .7391 | .7345 |
NZDUSD | .6800 | +0.60% | .6827 | .6759 |
USDCHF | .9733 | +0.28% | .9762 | .9727 |
EURGBP | .7888 | -0.26% | .7898 | .7856 |
EURCHF | 1.1089 | +0.09% | 1.1101 | 1.1080 |
USDCAD | 1.2920 | -0.08% | 1.2938 | 1.2889 |
USDCNH | 6.5367 | 0.0% | 6.5393 | 6.5327 |
FXO
Ahead of tomorrow’s inflation report in the UK, overnight Cable has a mid. volatility of approx. 17.0%. Volatility around the referendum date is ever increasing with the two month straddle paid up to as high a vol. level as 15.95% yesterday.
Sentiment within the retail currency options space at Saxo Bank A/S shows a shift in USD/JPY bias by 4%, in favour of the upside. 17% of traders now favour long call and/or short call positions in this pair.
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