Forex news and economic data headlines 3 October 2016

News:

  • UK's Hammond: No ifs, no buts, no second referendum, we are leaving the EU
  • UK's Hammond says the sooner a Brexit deal is done the sooner certainty will be restored
  • More from UK's Hammond: Key thing is to have access to EU single market without tariffs or quotas
  • Until a letter arrives from the UK there will be no negotiation says European Commission
  • ECB's Villeroy says Brexit is bad news for UK and Europe
  • BOE's FPC to release 2016 bank stress tests 30th November
  • Banks are in critical need of capital increases says Bank of Portugal's Costa
  • AUDUSD underpinned by option expiry support
  • More option expiries of note over the next few days
  • Option expiries for the 10 am NY cut today 3 Oct
  • Nikkei 225 closes up +0.9% at 16,598.67

Data:

  • September 2016 UK Markit/CIPS manufacturing PMI 55.4 vs 52.1 exp
  • Eurozone Markit mftg PMI Sept final 52.6 as exp
  • Germany Markit mftg PMI Sept final 54.3 as exp
  • France Markit mftg PMI Sept final 49.7 vs 49.5 exp
  • Italy Markit mftg PMI Sept 51.0 vs 50.3 exp
  • Spain Markit mftg PMI Sept 52.3 vs 51.5 exp
  • Switzerland mftg PMI Sept 53.2 vs 51.8 exp
  • Switzerland retail sales Aug yy real -3.0% vs -1.7% exp
  • India Markit mftg PMI Sept 52.1 vs 52.6 prev
  • Japan vehicle sales Sept YY 3.7% vs 5.7% prev

It's been a soggy start to the week in the wake of yesterday's Article 50 announcement by UK PM Theresa May.

GBPUSD opened at 1.2935 having failed to rally back above 1.2950 after its Asian lows of 1.2905 and it didn't take long for European desks to give it another slap to take out the 1.2900 demand and trigger stops to 1.2873 just ahead of the 15 Aug 1.2866 lows.

Some better final PMI readings out of the Eurozone helped put a spring in the euro's step and that pushed EURGBP up through 0.8725 triggering stops to post 0.8747 just ahead of the next tranche of offers/res before then retreating. That rally saw cable post session lows of 1.2845.

Stronger than expected UK mftg PMI data gave the pound some reprieve but GBPUSD has failed into 1.2900 and EURGBP into 0.8720 so far.

EURUSD has been underpinned round 1.1230 but still faces good sell interest at 1.1250 with larger offers between 1.1280-1.1300 while USDJPY enjoyed some risk-on demand in Asia but it too ran into sell interest ahead of larger offers between 101.80-102.00 with option expiries also notable up there. The European range has been tight between 101.25-50 with some GBPJPY selling negating the general yen supply.

AUDUSD had found some option related support at 0.7640 in Asia and that platform along with firmer commodity prices has seen the pair advance further to 0.7681 while USDCAD conversely has fallen to 1.3067

No DAX to lead the way on equities today with Germany on hols and we've seen flattish performances on the other exchanges.

US ISM data the highlight across the pond but it's the pound still stealing the headlines.