Forex headlines for the European morning session 2 Dec 2016
News:
- Russian ministry and companies actively working out details of agreement with OPEC
- Protest vote continues as Lib Dems win UK by-election
- NFPs and option expiries combine to keep FX ranges contained
- Italy faces "no risk of financial earthquake" from referendum
- Latest Reuters poll expects ECB to announce 6-month extension of QE beyond March
- Option expiries for the 10 am NY cut today 2 Dec
- More FX option expiries of note on Monday
- Nikkei 225 closes down -0.47% at 18,426.08
Data:
- Eurozone Oct PPI mm +0.8% vs +0.4% exp
- UK Markit/CIPS Nov construction PMI 52.8 vs 52.2 exp
- Swiss Q3 GDP qq 0.0% vs +0.3% exp
- Spain net unemployment change Nov mm 24.8k vs -25.6k exp
Compared to recent sessions it's been a far steadier affair this morning but not without some opportunity for those not putting their feet up until the US NFPs and wages data.
USDJPY began the morning sneaking back above 114.00 from 113.80 but soon ran out of puff as oil prices turned lower on doubts over the OPEC deal detail and that brought other core pairs lower too as yen demand returned.
Once again GBPJPY led the way from 144.05 to 143.15 taking USDJPY down to 113.60 and dragging GBPUSD down below 1.2600 from 1.2630. EURGBP didn't want to hold above 0.8450 and with the EURJPY supply we saw EURUSD also drop to 1.0638 from 1.0665 but contained by large option expiries again.
We've since seen oil prices firm up and yen sellers return lifting core pairs and giving USDCAD another shove below 1.3300 with Canadian jobs data also looming.
Turkish lira has tumbled again with talk of the central bank intervening but failing to stem the tide of outflow after they hiked interest rates last week causing some further panic.
All eyes though on the US NFPs and any further clues to interest rate hikes.
