European Open Briefing

Asia Brief: Australian Private Capex 1.1 % vs -0.3 % expected. Australian HIA New Home Sales -5.7 % vs +1.2 % previous.

Global Markets: Nikkei down 0.60 %, Shanghai Comp and Hang Seng dropped 0.30 % and ASX declined 0.50 %. Commodities mixed; Gold at $1287 (+0.30 %), Silver at $19.59 (+0.50 %) and Crude Oil at $93.50 (-0.40 %). US 10 year yield stands at 2.35.

FX Overview: EUR/USD rose to 1.3216 overnight on USD-negative month-end flows and a Reuters story about an ECB source saying that the central bank will not take any new action next week unless there is another decline in inflation figures. Still talk of offers at 1.3220 and stops around 1.3230. Focus today will be on German inflation figures at 1300 BST.

Cable still struggling and solid resistance lies at 1.6610. A break above is needed for bulls to regain some strength. To the downside, intraday support at 1.6570 and key tech support at 1.6535. Mixed flows in USD/JPY overnight. USD selling into month-end kept the pair under pressure, but importer bids prevented a further decline. Good bids reported ahead of 103.50. To the topside, offers have been lowered to 104.00 and 104.20 remains key resistance.

AUD/USD extended gains after the solid Capex number, hitting a high of 0.9370. Supply ahead of the 0.9372 resistance level capped the topside however and the pair is now slowly falling back sub-0.9350. Bids at 0.9320, but key support is 0.9270. USD/CAD is trading heavy. Corporate demand noted from 1.0840 down to the big figure with larger stops resting at 1.0810. To the topside, offers said to be building at 1.0885, near the 200 DMA. Pair is likely to consolidate ahead of key US data releases today and Canadian GDP figures tomorrow.

Looking ahead, we have:

  • 0800 BST – Spanish GDP & Inflation
  • 0815 BST – Swiss Employment Level
  • 0830 BST – Swedish Retail Sales
  • 0855 BTS – German Unemployment Rate
  • 0855 BST – German Unemployment Change
  • 0900 BST – Euro Zone M3 Money Supply
  • 1300 BST – German CPI
  • 1330 BST – Canadian Current Account
  • 1330 BST – US GDP
  • 1500 BST – US Pending Home Sales

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