Originally published by AxiTrader
Markets Overview:
- Equities: Nikkei 225 (-0.44 %), Hang Seng (-1.15 %), CSI 300 300 (-0.42 %), KOSPI (+0.38 %), S&P/ASX 200 (-1.04 %)
- Commodities: Crude Oil $49.24 (+0.12 %), Brent Oil $50.05 (+0.14 %), Natural Gas $2.74 (+0.26 %), Gold $1266.71 (-0.03 %), Copper $213.35 (-0.56 %)
What traders are talking about:
Dollar up, while Aussie under pressure
It was a rather subdued trading session amid a lack of data and events. The Dollar gained against most other major currencies overnight, while the Aussie Dollar came under renewed pressure after another failure above 0.77. The Euro and the Pound retraced some of its earlier gains, as the topside was capped at 1.0950 and 1.2250 respectively. Meanwhile, USD/JPY is struggling as well, despite the Greenback being bid across the board. USD/JPY was rejected off 104.70 resistance in the early Tokyo session and declined to 104.30 later in the day.
New Zealand deficit increases
New Zealand's deficit increased from NZ$1.24 billion to NZ$1.43 billion, while the market was expecting a decrease to NZ$1.12 billion. Exports declined from NZ$4.62 billion to NZ$3.47 billion, while imports rose from NZ$4.62 billion to NZ$4.90 billion.
Morgan Stanley (NYSE:MS) expects EUR/CHF to stay in 1.08-1.10 range
The US investment bank thinks that the 1.08 level in EUR/CHF is a line in the send for the Swiss National Bank and that the central bank could intervene should it decline significantly below it. Morgan Stanley expects EUR/CHF to remain in a 1.08-1.10 range, while it forecasts USD/CHF to reach 1.01 in the next few weeks.
Deutsche's FX positioning report
Deutsche Bank (DE:DBKGn) released its latest FX positioning report yesterday. While this limited to the flows that the bank sees, DB is still one of the largest market makers in FX with a variety of client types. The German bank noted in their report that GBP selling interest remains high, and that GBP/USD was heavily sold on the rally above 1.22 that occurred last week. We've seen something similar yesterday, when Cable was clearly rejected off 1.2250. Meanwhile, USD shorts were cut against the Yen and Kiwi, according to Deutsche, while CAD shorts were increased post-BoC. In emerging markets currency, Deutsche saw decent interest in MXN selling, despite the rally in the Peso over the past few weeks.
UK GDP
The main event today will be the release of UK GDP data. The market is expecting a sharp decline in Q3, mostly due to the effects of Brexit. The quarter-on-quarter number is expected to arrive at 0.3 % (vs. 0.7 % previously) and 2.1 % year-on-year (unchanged from the previous release).
What the Charts are saying:
While the SNB never mentioned any specific levels in EUR/CHF after the 1.20 floor was pulled, a look at the charts makes it clear that 1.08 is indeed an important level and acted as key support many times. We cannot know if there is actual SNB intervention around 1.08, but it is a level worth watching.
Economic Calendar:
- 09:30 BST - UK GDP
- 13:30 BST - US Initial Jobless Claims
- 13:30 BST - US Durable Goods Orders
- 15:00 BST - US Pending Home Sales