Forex news from the European morning session 1 Feb

News:

  • ECB's Coeure says they may reconsider policy in March
  • ECB's Nowotny says markets expected too much from December meeting
  • EU says progress has been made on reform talks with UK
  • National fiscal policies need to be better coordinated says ECB's Smets
  • ECB's Nowotny voices particular concern over recent developments in China
  • Option expiries 10am NY cut today 1 Feb

Data:

  • January 2016 UK Markit/CIPS manufacturing PMI 52.9 vs 51.6 exp
  • Eurozone Markit mftg PMI Jan final 52.3 as exp
  • Germany Markit/BME mftg PMI Jan final 52.3 vs 52.1 exp
  • France Markit mftg PMI Jan final 50.0 as exp
  • Italy Markit mftg PMI Jan 53.2 vs 54.8 exp
  • Portugese jobs data improved in December
  • December 2015 UK mortgage approvals 70.8k vs 69.6k exp
  • Australia commodity index Jan yy -25.8% vs -23.3% prev
  • Japan vehicle sales Jan yy +0.2% vs +3.1% prev
  • Nikkei 225 closes up 1.98% at 17,865.23

It's been a lively enough start to the new month with no clear trend or direction but opportunities still to be had.

Same old, same old then so far this year with oil and equities in focus.

USDJPY pared some early gains as Nikkei and equities turned lower but found demand into 121.00.EURJPY maintained its own tight range to start with but as European equities turned lower so euro demand also returned after an early wobble.

EURUSD found buyers below 1.0850 again and EURJPY below 131.20 while EURGBP had an early trip down to 0.7576 accelerated by better UK mftg PMI which saw cable rally to 1.4323 from 1.4285 before finding sellers only too eager to take full advantage.

USDCHF has largely shadowed EURUSD with EURCHF still finding dip-demand and with the smoothing hand of the SNB seemingly never too far away.

Oil has been on the back foot but eventually found a bit of demand but that's done little to curb the USDCAD rallies into 1.4060 from 1.3990 while AUDUSD and NZDUSD have traded tightly caught up in the crossfire.

US data to come then ECB Draghi steps up to the rostrum ahead of which traders will remain understandably cautious.