Forex trading headlines for the European morning session 2 September
- UK markit mftg PMI august 57.2 vs 55 exp 54.6 prev
- Spanish markit mftg PMI august 51.1 vs 49.8 prev
- Swiss PMI august 54.6 vs 55.9 exp 57.4 prev
- Italian markit mftg PMI august 51.3 vs 51.0 exp
- French markit mftg PMI august 49.7 as exp/prev
- German markit mftg PMI august 51.8 vs 52exp/prev
- EZ markit mftg PMI august 51.4 vs 51.3 exp/prev
- Pound continues to find support on Vodafone-Verizon deal to be announced today
- UK gilts post highest levels since july 2011
- Nikkei closes up 1.37% at 13,572.92
- Shanghai comp index closes flat at 2098.45
- BOE says net lending on FLS for Q2 was GBP+1.6 bln
- Portugal says next Troika review on bail-out to begin on Sept 16
The pound has been a strong performer this morning after better than expected mftg PMI caused another spike following good overnight support from the Vodafone-Verizon deal due to be announced today.
GBPUSD found decent support from 1.5550 once Europe came in and was trading around 1.5570 when the PMI data caused a sharp spike to 1.5994 before retreating in the face of strong sell interest at 1.5600. Bids have been coming around 1.5570 since though. EURGBP had bounced off 0.8485 support early on but failed to hold above 0.8500 and was already on the way down when the data kicked it down to 0.8472 taking out good buying interest at 0.8475 but not going deep enough to trigger stops below 0.8470 and we saw a bounce to 0.8487. Been trading in a tight 82-92 range since.
Overall the pound continues to find support from the anticipated fx cash impact of the Vodafone-Verizon deal but we’ll have to wait to see whether the anticipated amount of cash ( est. USD 60bln out of the 130 bln total) is confirmed. In any case this deal has been on the table for a while now and so we should expect longs to be booking profit into any rally.
The Syrian crisis still looms large but with Obama running it past congress first the immediate threat of military strikes is delayed further. Cue yen pairs being sold off with USDJPY rising to one-month highs of 99.38 dragging all pairs in its wake. EURUSD has gone nowwhere though really and remains firmly ensconced in a 1.3170-1.3270 range for the moment. Most of the morning it’s done little more than 1.3210-25
The aussie has also had a decent morning with AUDUSD climbing to 0.9914 having triggered stops through 0.9000 but finding the next set of offers one step too far for the moment. AUDJPY up to 89.54 but with EURAUD also a notable mover down to 1.4662.
US Labour Day hols today should see this market wind down even more over the next few hours but let’s hope for a few sparks along the way.
