Forex news from the European trading session - 22 June 2018
Headlines:
- Germany's SPD is said to prepare for new elections - report
- Pre-OPEC meeting comments showing a good chance of an agreement
- Italy's Borghi says he is not to blame for widening Italy-Germany bond yields spread
- Eurozone June preliminary manufacturing PMI 55.0 vs 55.0 expected
- US is said to ask Japanese buyers to stop Iran oil imports
- Germany June preliminary manufacturing PMI 55.9 vs 56.3 expected
- France June preliminary manufacturing PMI 53.1 vs 54.0 expected
- Italy's Lega maintains that euro exit is not part of government's plan
- France Q1 final GDP +0.2% vs +0.2% q/q estimated
- Japan May nationwide department store sales -2.0% vs +0.7% y/y prior
- Japan April all industry activity index +1.0% vs +0.9% m/m expected
Markets:
- AUD leads, JPY lags behind on the day
- European equities are higher, Italy's MIB lead gains
- Gold up 0.13% to $1,268.81
- WTI up 1.17% to $66.31
- US 10-year yields up 1.7 bps to 2.913%
- Bitcoin down 5.56% to $6,345
The session started with the dollar on the back foot and the OPEC meeting in Vienna being the focal point of the market's attention. But then the dollar gave up gains further right before European trading began and continued for the most part as EUR/USD and GBP/USD both broke key near-term levels during the session.
The other driver of sentiment during the session was equities. Asian equities posted a solid end to the day and that spilled over to European trading as well, resulting in a push higher for stocks and a lower move in bonds. That poured fuel to the fire for the aussie and kiwi as the two commodity currencies pushed higher while the yen, swissie, and dollar continue to be left behind.
Looking at the individual pairs, EUR/USD started the session near 1.1620 levels before extending to highs of 1.1675 as composite PMI readings helped to provide some much needed data relief for the euro. But the pair has since fallen back with German political risks still on the cards and the dollar index holding up at key levels too.
USD/JPY has had a rather subdued day as both currencies are having a rather poor day thus far. The pair sits in a 37 pips range, and traded between 110.00 to 110.20 for the majority of the session.
As for GBP/USD, the pair started the session near 1.3260 levels before climbing to a high of 1.3315 where it met resistance at said level before falling back down again. But it still trades near the highs just shy of the 1.3300 figure level.
The two big gainers on the day though has been the aussie and the kiwi. Both AUD/USD and NZD/USD has made a slow and steady march higher on the day and with equities looking perky in Europe, both pairs continue to extend gains and sit near the highs for the day.
Other than that, there were plenty of OPEC headlines prior to the closed door meeting that is taking place now. Iran and Saudi Arabia had a separate meeting beforehand to discuss some details but so far the signs are looking good for an agreement. Despite that, oil prices have been trading higher on the day with both Brent and WTI trading up by more than 1% currently.
