Forex news headlines and economic data for the European session 7 June 2016
News:
- RBA leaves interest rates on hold
- China's Yi says PBOC and US Fed have very good communication with each other
- US and China committed to continue "market oriented exchange rate reform"
- India's Rajan says RBI looking for room to ease policy
- Italian economic growth likely to slow down in short-term
- Bank of Spain says economy to continue expansive phase
- ONS reports strong inward M&A activity for the UK
- BOJ should scrap negative rates says Abe opponent
- EU says progress continues toward closure of Greek review
- What now for the pound after the overnight tree shake?
- China forex reserves end-May USD 3.19 trln vs USD 3.2 trln expected
- SNB forex reserves end-May CHF 602.06bln vs CHF 587.88bln prev
- Australia foreign reserves May AUD 80.1bln vs AUD 65.7bln prev
- FXDD to merge with IRON FX
- Option expiries 10 am NY cut today 7 June
- Nikkei 225 closes +0.58% at 16,675.45
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Data:
- Q1 2016 Eurozone GDP final 0.6% vs 0.5% exp q/q
- Germany industrial production April mm SA +0.8% vs +0.7% exp
- France trade balance April -EUR 5.219 bln vs -EUR 4.45bln exp
- Spain industrial output April mm 0.0% as expected
- UK Halifax house price index May mm +0.6% vs +0.3% exp
- Japan leading index CI April flash 100.5 vs 100.7 exp
Another session with markets treading carefully as the pound continues to dominate the headlines,
Asia zone trading was focussed on the RBA decision at 04.30 GMT but 20 minutes prior, just I sat down for my shift, we saw a sharp move in GBP with cable spiking to 1.4660 from 1.4480 and EURGBP down to 0.7750 from 0.7840. Within 10 minutes we were back to 1.4510 and 0.7825 with the blame being thrown at a combo of algo-box aberrations, fat-finger, Brexit poll all in a heady mix of graveyard-shift thin liquidity.
Since then we've been to 1.4493 then 1.4600 with EURGBP finally yielding again to post 0.7785 as euro pressure prevails. EURCHF has been under the cosh and EURUSD struggled to climb to 1.1380 before falling back to 1.1355 as I type. Equity markets have enjoyed Yellen's dovish tones and that's added to the euro supply.
Meanwhile the Aussie $ had a decent rally as RBA left rates on hold and spoke in less dovish tones. AUDUSD advanced to 0.7454 from 0.7365 after wiping its feet at 0.7400 and 0.7435 and the ccy generally has had a good morning with AUDJPY breaking up through 80.00 and posting 80.32. USDJPY has largely been contained in a 107.65-85 range as cross play interest prevails.
USDCHF has been under the cosh with EURCHF retreating to 1.0975 but found demand below 0.9650 while USDCAD has also been on the back foot as oil prices enjoy another good session with Brent and WTI crude posting 2016 highs.
US non-farm productivity and Canadian Ivey PMI both on the data agenda and we should expect the fragile trading conditions to continue.
