Forex news from the European trading session - 8 June 2018
Headlines:
- Trump says he's looking forward to straighten out "unfair trade deals" at G7 summit
- Emerging market concerns clear for all to see
- Iran's OPEC governor says oil could reach $140 on US sanctions and Venezuela worries
- Italy's Savona says new government aims at a "stronger and fairer" Europe
- BOE/TNS May inflation expectations 2.9% vs 2.9% prior
- Di Maio says that Italy is to ask more funds from EU budget
- France April industrial production -0.5% vs +0.3% m/m expected
- Germany's Altmaier says no one knows how G7 summit will end
- Germany April industrial production -1.0% vs +0.3% m/m expected
- Germany April trade balance €20.4 bn vs €20.2 bn expected
- Japan May economy watchers survey current conditions 47.1 vs 49.2 expected
Markets:
- JPY leads, AUD lags behind on the day
- European equities lower, Italy MIB leads losses down 1.4%
- Gold up by 0.18% to $1,299.56
- WTI down by 0.49% to $65.63
- US 10-year yields down by 1 bps to 2.91%
- Bitcoin down by 1.08% to $7,577
The session started off with some hints of cautiousness but as European equities opened, the negative tones in risk sentiment started winning out as the Japanese yen gained throughout the session. Key levels were taken out in yen pairs with USD/JPY falling below the 200-hour MA, AUD/JPY falling below the 100-day MA, with both EUR/JPY and GBP/JPY falling below the 100-hour MA as well.
It was a steady track lower for yen pairs, and we're seeing more of that again as we move towards the US session with other major currencies trading near the lows as well. The risk-off tones were mainly triggered from worries on trade as we head into the G7 summit later, as well as emerging market worries that are creeping back into the picture as well.
The dollar was the other beneficiary from that being the second best performing major currency. EUR/USD started the session near the 1.1800 handle but steadily moved lower and now touches a low of 1.1733 as I type this up. Same story for GBP/USD as the pair traded around 1.3420 levels before tracking lower now below the 1.3400 handle.
USD/CAD made a steady climb above the 1.3000 handle, but with large expiries at the figure level, it's not seeing much of an extension since touching a high of 1.3029 earlier in the session.
The AUD meanwhile is the weakest performing major currency again in the European session, as risk-off flows and further selling against the yen and kiwi accelerated losses for the currency.
We're all primed up for the G7 summit later, but for all the hype, expect it deliver a bout of disappointment and possibly, a tweet or two from Trump to convince the market that he did win over his counterparts.
