Forex news from the European trading session - 12 September 2018
Headlines:
- Italy's Five-Star party will seek Tria resignation if it does not get €10 billion for citizens' income - report
- OPEC says risks brewing in the global economy could hurt global oil demand
- US MBA mortgage applications w.e. 7 September -1.8% vs -0.1% prior
- China August M2 money supply +8.2% vs +8.6% y/y expected
- Italy Q2 unemployment rate 10.7% vs 10.8% expected
- Eurozone July industrial production -0.8% vs -0.5% m/m expected
- ECB is said to slightly lower economic growth projections in tomorrow's meeting
- Italy July industrial production -1.8% vs -0.3% m/m expected
- EU's Juncker says that Barnier is masterfully handling Brexit negotiations
- Spain August final CPI +0.1% vs +0.2% m/m prelim
- Di Maio on citizens' income: We are going to do it, we made a promise to Italians
- BOE's Carney says "history teaches us that no one can rule out another crisis"
Markets:
- JPY leads, GBP lags on the day
- European equities mixed, Italy leads losses after Five-Star report on Tria
- Gold down 0.38% to $1,194.03
- WTI up 0.95% to $69.91
- US 10-year yields down 1.5 bps to 2.96%
- Bitcoin down 0.23% to $6,240
It's been a relatively mixed session with some minor swings though nothing too large ahead of US trading. The yen led the way to begin proceedings and ends as the top dog in the major currencies bloc. Asian equities were weaker and sentiment was a little soft ahead of European trading and that helped the yen to gain. USD/JPY started the session around 111.50 and tracked lower to 111.44 before now moving back to around 111.50 again.
Treasury yields barely moved in early trading but has since inched lower on the day and that is helping to underpin the Japanese yen as well.
The dollar mainly moved around with the yen in the same direction as both currencies moved around against the rest of the major bloc. GBP/USD took a bit of an early fall to 1.3000 alongside other currencies before the dollar and yen was offered a little at the start of European trading.
GBP/USD rose to 1.3030 while EUR/USD tracked higher to 1.1600 after having touched a session low of 1.1570 earlier. The euro then took a bit of a spill following a report that the ECB is said to lower its economic growth forecasts in tomorrow's monetary policy meeting. EUR/USD fell to 1.1580 levels from there.
There wasn't much other action on the day but there was time for the pound to take a bit of a hit as we await North American traders to join the fray. Cable moved lower from 1.3030 to touch a low of 1.2980 with other currencies also gaining against the quid. EUR/GBP is back above 0.8900 again trading near the highs at 0.8915.
Commodity currencies offered little action as the aussie and kiwi continued to stay weak. AUD/USD traded around 0.7095 to 0.7110 for the most part with aussie sentiment still relatively soft ahead of tomorrow's labour market report.
The loonie is one of the more decent performers today following earlier news in overnight trading that Trump is more optimistic on a NAFTA deal and a report that Canada is ready to make concessions to the US regarding protectionist dairy policies. USD/CAD started the session around 1.3060 levels before moving to a low of 1.3042 but recovered late in the session and now trades near session highs just above 1.3070.
