- North Korea continues to raise regional tensions, calling the US “hostile”
- Regional stock markets fall around 1% amid more risk aversion
- Japans’ retail consumer index rises by 4 pts
- Rio Tinto agrees 33% cut in iron ore prices in talks with Nippon steel. This is less than the 45% cut that China has been touting.
- OPEC not expected to change oil production policy- Saudi oil minister
- Bearish articles on the EUR in todays Telegraph detailing banks and automakers may impact on European trading.
Trade was very slow after the NY holiday and EUR/USD did not trade for the first 2 hours of the session. The first move once Asia joined in was to sell JPY crosses, with EUR/JPY falling from 133 to 132.60 before rallying strongly as regional stock markets opened higher. EUR/JPY traded to its session high at 133.30 and EUR/USD to 1.4020 before news of the latest statements from North Korea hit the screens. This led to a swift sell-off in the JPY crosses as risk aversion took precedent over possible impact on the JPY. EUR/USD triggered stops below 1.3950 and AUD/USD triggered some under .7770 before the market stabilised around lunchtime.
Further stops are anticipated in EUR below 1.3915 and below .7710 in the AUD/USD.
Markets: Nikkei -0.5%; Kospi -1.7%; Shanghai -0.25%; HK 0; Gold -$4 at $955/oz. Oil Flat at $60/bbl.
Ranges: EUR/USD 1.3945/1.4022; Cable 1.5863/1.5926; USD/JPY 94.62/95.07; EUR/JPY 132.02/133.28; AUD/USD .7747/.7822.
