Europe Brief: Italian Industrial New Orders -1.5 % vs +1.1 % expected. Italian Industrial Sales -1.30 % vs +0.10 % previous. Swiss M3 Money Supply 3.4 % vs 3.5 % f/c. Citi recommends going long GBP vs JPY and AUD. Barclays recommends shorting EUR/GBP as trade of the week.
Global Markets: DAX down 0.20 %, FTSE declined 0.75 %, CAC lost 0.10 % and Eurostoxx 50 fell 0.30 %. Gold at $1215 (-0.15 %), Silver at $19.69 (-0.90 %), Crude Oil at $91.35 (-0.30 %). US 10 year yield at 2.56.
FX Overview: It has been a quite lively session despite the lack of data. The focus was on commodity currencies, which all extended losses against the US Dollar. AUD/USD broke below 0.89 amid steady selling from leveraged names and a sizeable bunch of stops got cleared on the way to 0.8862. There is talk of bids at 0.8850, but the next major chart support lies at 0.8830/35. Below there, a test of the yearly low at 0.8658 seems likely. USD/CAD rallied to 1.0995, but hit into some selling interest pre-1.10. I think the pair will be well supported on dips and would look at 1.0940/50 for decent intraday support. 1.10 unlikely to be a major obstacle and 1.11 remains the next bull target. Meanwhile, NZD/USD has retraced overnight gains and hit a fresh daily low of 0.81 earlier. Bids are noted at 0.8080 and ahead of the 0.8050 support level. It's an important tech level and a daily close below would likely attract further selling.
Not much to report about EUR/USD and GBP/USD - flows were light and no news to get them moving. USD/JPY was supported overnight by buying from local names and demand from leveraged names increased in the London session. 109.12 is the high so far and dealers in Asia reported solid offers around 109.20. Above there, option-related supply pre-109.50 (barrier option).
Looking ahead, we have ECB President Draghi speaking at 1300 GMT and US Existing Home Sales data at 1400 GMT.
Global Markets: DAX down 0.20 %, FTSE declined 0.75 %, CAC lost 0.10 % and Eurostoxx 50 fell 0.30 %. Gold at $1215 (-0.15 %), Silver at $19.69 (-0.90 %), Crude Oil at $91.35 (-0.30 %). US 10 year yield at 2.56.
FX Overview: It has been a quite lively session despite the lack of data. The focus was on commodity currencies, which all extended losses against the US Dollar. AUD/USD broke below 0.89 amid steady selling from leveraged names and a sizeable bunch of stops got cleared on the way to 0.8862. There is talk of bids at 0.8850, but the next major chart support lies at 0.8830/35. Below there, a test of the yearly low at 0.8658 seems likely. USD/CAD rallied to 1.0995, but hit into some selling interest pre-1.10. I think the pair will be well supported on dips and would look at 1.0940/50 for decent intraday support. 1.10 unlikely to be a major obstacle and 1.11 remains the next bull target. Meanwhile, NZD/USD has retraced overnight gains and hit a fresh daily low of 0.81 earlier. Bids are noted at 0.8080 and ahead of the 0.8050 support level. It's an important tech level and a daily close below would likely attract further selling.
Not much to report about EUR/USD and GBP/USD - flows were light and no news to get them moving. USD/JPY was supported overnight by buying from local names and demand from leveraged names increased in the London session. 109.12 is the high so far and dealers in Asia reported solid offers around 109.20. Above there, option-related supply pre-109.50 (barrier option).
Looking ahead, we have ECB President Draghi speaking at 1300 GMT and US Existing Home Sales data at 1400 GMT.
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