Forex news from the European trading session - 5 January 2018
Economic data:
- Italy December prelim CPI m/m +0.4% vs -0.2% prior
- Eurozone December prelim CPI y/y +1.4% vs +1.4% expected
- UK Q3 total unit labour costs y/y +1.3% vs +2.4% prior
- Eurozone December retail PMI 53.0 vs 52.4 prior
- UK December new car registrations y/y -14.4% vs -11.2% prior
- Germany December construction PMI 53.7 vs 53.1 prior
- France December consumer confidence 105 vs 103 expected
- France December prelim CPI m/m +0.3% vs +0.3% expected
- Germany November retail sales m/m +2.3% vs +1.0% expected
Central banks/Government:
- Fed's Bullard: Will watch to see if tax cuts drive up US productivity
- PBOC: To encourage companies to use CNY in cross-border transactions
- Japan PM Abe: Asking for 3% wage rises to put economy in a virtuous cycle
Others:
- All your US jobs report previews in one place
- Bitcoin is a hit in South African countries
- FX option expiries for the 10am NY cut - 5 Jan 2018
- CBA: Too early to say the trade sector trend is on the way to permanent deterioration
- Intel CEO reportedly sold $39 million worth of shares after learning about design flaw
- Nikkei 225 closes up by 0.89% at 23,714.53
Markets:
- NZD leads on the day, JPY lags behind
- European equities are all higher on the day again (DAX is up 1.0%)
- Gold is down by 0.37% to $1,317.83
- WTI crude is down by 0.95% to $61.42
- US 10-year yields is up by 1/2 bps to 2.46%
- Bitcoin is up by 6% to $15,860
It was a decent European trading session in spite of it being NFP Friday - apart from the last two hours of lull after all the economic data has been released that is.
The dollar started the day mixed against most major currencies, but built some momentum mid-way through and for the most part, has held onto its gains.
The NZD was mostly unchanged against the USD on the day, taking turns to lead the rest of the major bloc. NZD/USD is still holding above key technical levels I pointed out yesterday, and buyers are holding onto control in the pair.
Meanwhile, it was an eventful session for the GBP. The sterling was leading the way after the Asian session, but then fell as the dollar posted some gains. Cable fell to lows of 1.3524, before finding its way back up now to 1.3554.
The EUR had a more quiet session as the range for the day is only at 38 pips against the USD, with EUR/USD ranging between 1.2040 - 1.2060 in European trading. This range held through despite a slew of European data - but as I mentioned in the calendar preview, the data points take a back seat when we have US jobs report later in the day. Eurozone December preliminary core inflation disappointed expectations, but that didn't phase the EUR.
And the aussie remains on the backfoot following a surprise trade deficit posted for the month of November last year when the data was released earlier in the day here. October's trade balance data was also revised from a surplus to a deficit - and that put a dent in the AUD.
Lastly, the Japanese yen is the laggard in trading today (as it was yesterday). Equity markets are all surging with the Nikkei posting gains once again, and that's keeping USD/JPY underpinned - but also technical levels are supportive of a higher dollar against the yen as I pointed out here.
