Category: Daily Look

Oil is important to watch



The euro’s bounce against the dollar continued yesterday as stronger GDP data from the US wasn’t enough to compete against a poor consumer confidence reading. If shorts continue to be squeezed and EURUSD crawls higher we could see more pressure on the bears with a move back towards recent highs around 1.2600, especially since the US will start to wind down for Thanksgiving tomorrow. The real test for the euro comes this Friday when CPI data is released, expected to come in at 0.7% where anything higher could really see a pop higher in EURUSD.

For today there’ll be some focus given to sterling with the second reading of Q3 GDP which is due to stay steady at 0.7%. There is also the weekly jobless numbers and Michigan Consumer Sentiment, earlier in the week than usual due to Thanksgiving.

Oil is also going to be an important one to watch as we near tomorrow’s OPEC meeting and already Russia, Saudi Arabia, Mexico and Venezuela have failed to agree on a cut in production this morning ahead of the main meeting. The recent decline in crude prices has generated fierce debate over whether Saudi Arabia are actually driving oil lower to harm US shale producers and are therefore unlikely to implement a cut in production to put a floor under the oil price. But in reality it is in the interests of OPEC not to see oil fall too low so any decrease in production below 30 million barrels a day could see a good bounce for crude. However, we are unlikely to see a dramatic rally back towards $100 as the overall fundamentals of a slowing global economy underpin the negative outlook for crude.

Markets await US GDP release

Markets await US GDP release

Yesterday showed how good old fashioned support and resistance levels should always be closely watched as EURUSD bounced off the 1.2360 level for the second time of the month. EURUSD remains a well sold currency pair (even over half of FxPro’s client positions are short according to our dashboard, at the time of writing) and

China Repair and Restoration

China Repair and Restoration

Napoleon Bonaparte once said “Let China sleep, for when she wakes, she will shake the world”. The global financial markets are certainly trembling this morning, with emerging market and commodity-linked currencies soaring in value after Chinese policymakers brought their stimulus programme out of the shadows on Friday. Raw materials prices and global bourses surged on

EURUSD rises after positive German Ifo data

The spanner in the workings of FX markets last week was the interest rate cut from China on Friday. The initial reaction saw the Aussie gain, together with stocks, as investors once again took the view that central banks were coming to the rescue. But rate cuts in China are not the same as rate

Markets Awash in Liquidity; Loonie Leaps after CPI

Markets Awash in Liquidity; Loonie Leaps after CPI

With the Federal Reserve telegraphing to financial markets that a rate tightening cycle is slowly emerging on the horizon, the liquidity baton used to insulate global growth has been passed on to other developed nations, two of which signaled to markets overnight that the liquidity spigots were far from being turned off. Though many had

USDJPY unstable

USDJPY unstable

It’s not often you have a Japanese official talking about the yen being too weak, but we did overnight, something which put pay to the up-move in USDJPY. Finance Minister Aso said the recent decline had been too fast, which lead to USDJPY reversing from the 118.98 high. The move has been a combination of

Fed concerned with the global economy

Fed concerned with the global economy

The minutes to the October FOMC meeting in the US reflected a greater concern with the global economy, a theme that has become increasingly prevalent in recent weeks. There was also an increased focus on inflation expectations against this background of slower growth. In addition, there was a wider discussion regarding the Fed’s continued pledge

Markets await BoE minutes release

Markets await BoE minutes release

The main focus for markets today will be the minutes to the November Bank of England policy meeting. Given the tone of the recent Inflation Report, which revised down inflation projections, it would be surprising if two members were still voting for higher rates as has been the case since August of this year. A

G20 leaders concerned about global economy

G20 leaders concerned about global economy

Most majors were confined to established ranges during the European session yesterday after the initial gyrations in the wake of the Japanese GDP data. The euro was perhaps the only standout to this, comments from ECB President Draghi later in the day throwing some further crumbs of hope to the market that the ECB could

Japan back in recession

Japan back in recession

The troubles for Japan have worsened as the latest growth numbers showed the economy contracting by 0.4% in the third quarter. The market had expected a modest rebound after the Q2 slump (down 1.9%), which happened after the sales tax hike earlier in the year, which meant consumers front-loaded spending ahead of the increase. The