Originally published by AxiTrader
Markets Overview:
- Equities: Nikkei 225 (-0.14 %), CSI 300 300 (-0.09 %), KOSPI (-0.46 %), S&P/ASX 200 (-0.22 %), Hang Seng closed
- Commodities: Crude Oil $50.37 (-0.51 %), Brent Oil $51.16 (-0.43 %), Natural Gas $3.10 (-1.21 %), Gold $1263.67 (-0.17 %), Copper $209.60 (+0.01 %)
What traders are talking about:
Dollar is King
The Greenback strengthened across the board overnight, triggered mostly by the losses in the Euro following the ECB press conference. USD/JPY rallied to 104.20 in Asia and although it ran out of steam there, it remains well bid amid the broad USD strength. Expect decent support around the 103.20 level, followed by 102.80.
The commodity currencies are facing renewed pressure now, and the AUD/USD once again failed to sustain momentum above the 0.77 level. It tumbled back to 0.7620 overnight and short-term techs remain mixed. Meanwhile, NZD/USD fell from 0.7250 to 0.7160. Keep an eye on the 0.7130/35 area (former key resistance prior to breakout), as it could find good support there.
ECB: Wait for December
The European Central Bank left monetary policy unchanged yesterday, but kept the door open to an extension of the QE programme in December. ECB President Mario Draghi made it clear yesterday that the Governing Council decided to wait for December before taking any further decisions, and said that there were no discussions of tapering or extending the duration of QE. Draghi also warned that there would be no abrupt end to the quantitative easing programme, but rather wound down gradually.
The Euro first rose to a high of 1.1040 against the US Dollar in the early part of the press conference, but came then under renewed pressure after Draghi's tapering comments and eventually fell to a low of 1.0935 ahead of the Frankfurt close. In Asia, EUR/USD extended losses and declined to 1.0895. Techs have turned bearish and further losses seem likely, with 1.0950 and 1.1040 now the key resistance levels to watch. To the downside, there is no significant support until 1.0800/20.
Yuan weakens further
Following USD's appreciation overnight, China's central bank set the USD/CNY fix at 6.7558 today. USD/CNH, the offshore Yuan, rallied to a high of 6.7666.
Canadian CPI
The only notable data releases today are Canadian CPI and retail sales. The month-on-month CPI number is expected to arrive at 0.2 %, while the year-on-year figure is anticipated to come in at 1.5 %. Also, the market is expecting a 0.3 % month-on-month increase in retail sales.
Economic Calendar:
- 10:00 BST - Bundesbank President Weidmann speaks
- 13:30 BST - Canadian CPI
- 13:30 BST - Canadian Retail Sales
- 15:00 BST - Euro Zone Consumer Confidence