Forex new from the European trading session - 11 June 2018
Headlines:
- Mike Pompeo says talks with North Korea are progressing quickly
- UK April visible trade balance -£14.04 bn vs -£11.30 bn expected
- UK April manufacturing production -1.4% vs +0.3% m/m expected
- BOJ raises benchmark ratio for macro add-on balance to 30.5% for June, July, August
- Italy April industrial production -1.2% vs -0.5% m/m expected
- SNB total sight deposits w.e. 8 June CHF 576.3 bn vs CHF 576.5 bn prior
- Bank of France May industry sentiment indicator 100 vs 102 expected
- Japan May preliminary machine tool orders +14.9% vs +22.0% prior
- Germany's Altmaier says EU is ready to talk about 'imbalances' on trade
- Mexico says NAFTA ministers will reconvene again in early July to craft feasible agreement
- Trump feels that tomorrow's meeting is "going to work out very nicely"
- Kim Jong Un believed to be departing Singapore at 2 p.m. local time on the day of summit
Markets:
- EUR leads on the day, CAD lags behind
- European equities higher, Italy's MIB leads +2.2%
- Gold down by 0.29% to $1,295.52
- WTI down by 1.23% to $64.93
- US 10-year yields up by 1.7 bps to 2.962%
- Bitcoin down by 11.5% to $6,763.63
The day started off with a mixed tone as the euro and sterling both posted decent gains. EUR/USD and GBP/USD both traded to a high of 1.1821 and 1.3441 respectively as the session got underway but as the euro slowly gave back some gains, sterling's decline was a result of a capitulation following poor economic data.
April factory output figures were poor and that dampened the mood for sterling ahead of what is a big week for the global economy. GBP/USD fell from 1.3420 levels to a low of 1.3365 on the back of the poor data and subsequently broke the 200-hour MA to touch a low of 1.3345 on the day.
EUR/USD was also dragged a bit lower as the dollar gained against most other major currencies, falling back under 1.1800 with USD/CHF and USD/CAD also trading near session highs now. USD/CAD remains capped by the 1.3000 handle, as the loonie remains weak following the trade spat between Trudeau and Trump - as well as weaker oil prices on the day.
USD/JPY continues to pivot around the 110.00 handle for most of the session after touching the figure level. Higher yields and global equities sentiment is helping to keep yen pairs underpinned so far today.
The other two commodity currencies didn't do much as they opened with a gap down against the dollar before retracing those losses and stays almost unchanged since.
It's going to be a massive week for markets in terms of what is on the calendar, so brace yourselves. You'll still be able to catch a bit of a breather today, but look out for the days ahead as we'll get key economic data, central bank decisions, and political/geopolitical developments to add into the trading picture.
