Forex news from the European trading session - 27 April 2018
Economic data:
- Japan March housing starts y/y -8.3% vs -4.3% expected
- UK April Nationwide house price index m/m +0.2% vs +0.2% expected
- Germany March import price index m/m 0.0% vs +0.1% expected
- France Q1 preliminary GDP +0.3% vs +0.4% q/q expected
- France April preliminary CPI m/m +0.1% vs +0.1% expected
- Spain April preliminary CPI m/m +0.8% vs +1.0% expected
- Spain Q1 preliminary GDP +0.7% vs +0.7% q/q expected
- Italy March PPI m/m +0.4% vs +0.3% prior
- Germany April unemployment change -7k vs -15k expected
- UK Q1 advanced GDP +0.1% vs +0.3% q/q expected
- Eurozone April final consumer confidence 0.4 vs 0.4 prelim
Headlines:
- ECB's Coeure: Eurozone recovery isn't coming to an end
- UK PM spokesman says fundamentals of economy are strong
- UK's Hammond says 'exceptional' weather had some impact on GDP report
- North Korea confirms complete denuclearisation of Korean peninsula as a common goal
- ECB survey shows forecasters slashing inflation outlook for 2019, 2020
- ECB's Mersch: Policy normalisation conditional on outlook for price stability
- SNB's Jordan: Negative rates, interventions are still essential
- Lega's Salvini may be ready to break with Berlusconi - report
- BOJ's Kuroda says language change is not linked with new board membership
- More from Kuroda: Will consider additional easing if needed
- BOJ's Kuroda says growth in 2018 is to continue to exceed potential
- France's Le Maire: EU must be ready to act if US tariffs waiver not extended
- Economists see no risk of NAFTA termination despite Trump's swashbuckling comments
Markets:
- AUD leads, GBP lags behind
- European equities higher on the day
- Gold up by 0.10% to $1,318.21
- WTI down by 0.22% to $68.05
- US 10-year yields down by 1.5 bps to 2.966%
- Bitcoin up by 2.54% to $9,350
The session started off rather quietly with the dollar inching ahead a little, before we saw EUR/USD tread waters below 1.2100 and stayed there. There was general dollar strength elsewhere too, but nothing too notable.
Then came the UK Q1 GDP advanced reading. The figure missed to the downside with the annual growth figure being the lowest since Q2 2012. Snow or not, there is absolutely no way the BOE is raising rates in May now. And the pound's capitulation was the story of the session.
EUR/USD continues to be held up by large options near the 1.2100 level after falling below the figure level earlier in the day. Key levels for the pair are highlighted here and also look out for barrier options at 1.2200.
USD/JPY was one of the more quiet pairs as it traded between 109.20-30 for the most part of the session. Yields once again are going nowhere, and that's not really providing any help for yen pairs at the moment.
GBP/USD was the main story of the day thanks to sterling. The pair was already lower from dollar strength but the GDP report sent the pair into a downwards spiral taking out key support levels and now trades under 1.3800.
The commodity bloc is a little lower against the dollar for the most part with ranges kept in check. USD/CAD, AUD/USD, and NZD/USD all have ranges of 34, 29, and 31 pips respectively and moved in the dollar's favour earlier in the session before coming back to unchanged levels currently.
The next key risk event on the agenda is the US Q1 advanced GDP report. Let's see if any fireworks will come out of that one like we saw from the UK earlier.
