Analysts at ANZ Bank New Zealand Limited explained that trading was quiet with a lack of data and no further developments on the trade front keeping volumes light.
Key Quotes:
"Equities lifted a touch in Europe and were mixed in the US.
The S&P was up 0.3% at the time of writing; the DJIA was down 0.1%. USD was generally weaker. GBP was the biggest mover on the day with comments from Barnier that a deal could be reached by November sparking a rally. EUR also rose on the Brexit news, adding to the more positive tone after the Italian Finance Minister commented over the weekend that the government knows they need to cut debt and keep the budget deficit under control. NOK rose the most in the G10 after inflation rose to 1.9%, bolstering the case for a rate rise later this month. The US yield curve flattened with 2-year up 0.8bps and 10-year down 0.5bps. Italian yields fell 10-18bps. WTI dipped 0.2% and gold rose 0.1%.
DATA/EVENT PULSE
"SLIP: Eurozone Sentix investor confidence fell 2.7 points in September to 12. While below market expectations, the index is still sitting above June lows. But with a number of factors weighing on investors at present (including Brexit, political troubles in Italy, emerging market wobbles, and the potential fallout from further escalation in the trade war saga) sentiment may remain subdued for a while yet.
BETTER: UK trade balance improved in July. The goods trade deficit narrowed from a downwardly revised deficit of £10.7bn in June to £10bn in July (mkt: £11.7bn). When services are included, the trade deficit narrowed to £0.1bn in July. In the three months to July, the deficit in goods was £32.6bn and the surplus in services was £29.2bn leaving an overall deficit of GBP3.4bn for the 3 month period. This is important from a sterling valuation perspective. UK trade data are very close to balance and argue against the need for further sustained GBP depreciation. That said, Brexit sentiment and uncertainty remains the dominant influence in the FX market and that’s swinging daily at the moment. Meanwhile, UK GDP lifted 0.3% m/m in July (mkt: 0.1%) with solid services output supported by warmer weather and the World Cup. On a three-monthly basis, growth accelerated to 0.6% in July, from 0.4% in June."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price trades with mild negative bias, manages to hold above $2,300 ahead of US data
Gold price (XAU/USD) edges lower during the early European session on Wednesday, albeit manages to hold its neck above the $2,300 mark and over a two-week low touched the previous day.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.