Forex headlines for the European morning session 1 Dec 2016

News:

  • Eurogroup head Dijsselbloem says UK will not have EU member perks and prerogatives post-Brexit
  • Pound feeling the love as other plays push it higher
  • GBPJPY on the rise again as oil prices bounce from early dip
  • Azeri energy minister says yesterday's OPEC agreement is an important step for stability
  • Fitch says OPEC oil deal likely to result in much quicker market rebalancing
  • Japanese tax revenues to fall by JPY 1trln next year
  • BOJ's Sakurai says bond yields are moving roughly in line with expectations
  • Option expiries for the 10 am NY cut today 1 Dec
  • Nikkei 225 closes up +1.12% at 18,513.12

Data:

  • November 2016 UK Markit CIPS manufacturing PMI report 53.4 vs 54.5 exp
  • UK Nationwide house price index Nov mm +0.1% vs +0.2% exp
  • October 2016 Eurozone unemployment rate 9.8% vs 10.0% exp
  • November 2016 Eurozone Markit manufacturing PMI 53.7 vs 53.7 exp
  • November 2016 German Markit manufacturing PMI final 54.3 vs 54.4
  • November 2016 France Markit manufacturing PMI final 51.7 vs 51.5 exp
  • Italy Q3 GDP final qq +0.3% as expected
  • Italy Markit/ADACI mftg PMI Nov 52.2 vs 51.3 exp
  • October 2016 Italian unemployment rate 11.6% vs 11.6% exp
  • Switzerland mftg PMI Nov 56.6 vs 54.4 exp
  • Australia commodity index AUD Nov 109.7 vs 99.5 prev
  • Japan data - November Vehicle Sales: +13.9% y/y (prior +0.8%)

A new month but a continuation of recent themes as GBP pushes higher with euro and yen both weaker. News that the UK may agree to paying EU contributions still post-Brexit if it means a better deal also lending a helping hand.

Oil prices rally again after an early dip but equities reluctant to join in the party today as the Italian referendum on Sunday casts its shadow.

Large option expiry interest at 1.0600 today is keeping EURUSD contained along with the battle between EURGBP supply and EURJPY demand with yen selling once again being a prime mover.

Too much p/a to describe pip move by move ( check your charts) but the gist is a solid advance in GBPUSD from 1.2508 post weaker mftg PMI data to 1.2650 driven by GBPJPY to 144.60 from 142.70 in a move that's seen USDJPY up to 114.35 from 113.85.

EURUSD meanwhile had a move back through 1.0600 in Asia that extended to 1.0640 before retreating again with EURGBP falling down through 0.8450 support to post 0.8396.

USDCHF has been on the back foot with option expiries at 1.0200 helping to cap rallies and given extra impetus lower from EURCHF falling to 1.0755 on Italian referendum concerns

Meanwhile USDCAD found itself pulled around by the early fall then rise in oil prices while AUDUSD ran into good resistance at 0.7420 and has beat a steady retreat t test 0.7380 support again.

Plenty more data to come but it's not those numbers driving these markets at the moment, in Europe at least.