Forex news from the European morning session 14 January 2015
News:
- EU court adviser says OMT programme in line with EU law so long as certain conditions met
- EU court: Option of setting limit on government bond buying would call OMT effectiveness into question
- ECJ opinion on the ECB’s OMT programme – Read all about it!
- Mersch says that the ECJ opinion on OMT gives ECB discretion in assessing policy decisions
- Why the ECB is not legally out of the woods on QE after EU court decision
- Draghi says ECB unanimous in determination to meet mandate
- German fin min Schaeuble says monetary policy is up to the ECB
- Moodys says likelihood of a Greek exit from Eurozone still relatively low
- Russia fin min to propose cuts of 10% to all budget expenditure in 2015 apart from “protected” spending
- Russia’s Siluanov says central bank will gradually sell forex into market from reserve fund
- Any new Greek government cannot renegotiate agreements says Samaras
- ZEW chief says Greek debt haircut would be a “grave mistake”
- Italian presidential election to be held on Jan 29th
- Spain’s Rajoy says he expects 2014 GDP of +1.4%
- USDCAD pops 1.2000 as oil price slides again
- Cable pops 1.5200 to trigger stops
Data:
- US MBA mortgage market index 492 vs 329.9 prior
- November 2014 eurozone industrial production 0.2% vs 0.0% exp m/m
- French HICP Dec final mm +0.1% vs 0.0% exp
- Italy CPI Dec final mm 0.0% as per flash forecast
- Japan machine tool orders Dec yy flash +33.8% vs 36.6% prev
- Nikkei 225 closes down -1.71% at 16,795.96
It’s been a nutty morning across the board with plenty of opportunity, but not a session for the faint-hearted
USDJPY was the first to really move and we saw a pop finally through 117.00 having held on a few times in the wake of a falling Nikkei. The pair wiped its feet at 116.90 but failed to recover and we were soon having a look at 116.75 support with yen pairs similarly under pressure
But the demand there was enough to trigger some profit-taking and with USD+tones elsewhere we were flying back above 117.00 only to cap again into the 117.20 area that we had seen earlier . Cue a rapid drop back through 117.00 then 116.75 then at test of 116.50 support/bids before bouncing again to 117.00
Keep up at the back!
Meanwhile though the euro was also being pulled around as we waited for the OMT ruling from the EU court adviser.A move to 1.1812 as USD fell initially was soon being reversed back to 1.1785 before being slapped lower to 1.1728 as the markets digested the actual news and decided it really did offer the ECB a chance to go with QE next week
And not wanting to be left out of the fun and games cable had earlier strutted its stuff up through 1.5200 triggering stops to 1.5224 before trading 1.5190-1.5215 for a while , then a dip to 1.5175 where demand re-appeared. Cue the EURUSD collapse though and we saw GBPUSD test the lows below 1.5150 again before heading back to 1.5200 and a cap around 1.5195
EURGBP was as usual working in tandem with cable. Part instigator, part victim and a steady drop toward 0.7745-50 key support ran into support and 75month lows as GBPUSD capped out but were quickly breaking down below from 0.7775 to 0.7732 as the euro got trashed post-OMT headlines
Still keeping up?
So anyway, while all this was going on we had USDCAD popping through 1.2000 to post 1.2019 before dropping back to 1.1960. AUDUSD though was slighlty better behaved after recovering its losses from the Asian copper-led tumble and rsiong from 0.8080 to 0.8145 before settling around 0.8125. NZDUSD staged its own rally from 0.7690 to 0.7733 before it’s consolidation around 0.7720
Ok, you can breathe again. Recap over but beware of it all kicking off again before too long.
