Forex news and economic trading headlines 20 July 2016
Apologies for lack of normal service this session. BT broadband the problem affecting UK users
News:
- BOE regional agents report shows some hope post-Brexit
- Moody's say negative outlook on UK banking system reflects post-Brexit uncertainty
- Germany's Schaeuble to meet UK fin min Hammond for bilateral talks at G20 meeting
- Large 1.3200 option expiries helping to cable
- Japan and US to hold bilateral talks at G20 meeting this weekend
- Australia's Morrison says government needs to focus on budget improvement
- Turkey's Simsek says capital controls are out of the question
- Option expiries 10 am NY cut today 20 July
- Nikkei 225 closes down -0.25% at 16,681.89
Data:
- UK jobless claims change June 0.4k vs 3.5k exp
- Germany June PPI mm +0.4% vs +0.2% exp
- Eurozone current account May SA €+30.8bln vs €+36.4bln prev
- US MBA mortgage market index w-e 15 July 614.3 vs 622.4 prev
Another day, same old GBP rollercoaster ride.
In an nutshell the pound began the day on the back foot with GBPUSD particularly feeling a bit of USD-positive, rate hike related heat and with GBPJPY supply noted again. We posted lows into 1.3070 but then found support with large option expiries potentially in play and giving a helping hand back up above 1.3100.
Then came a better than expected UK labour report, albeit with some wobbly bits but that and the latest BOE regional agents report gave rise to a solid rally to post 1.3198. More expiries at 1.3200 though added supply to an already heavy order board and we've come back to 1,3170 as I type. EURGBP similarly has had its own move back down through 0.8400 to post 0.8340 before bouncing back to 0.8365.
USDJPY began the session on the front foot as the Nikkei pared early losses into the close and we came back through 106.00 after finding support/demand at 105.80 again. We wiped feet around 106.25 as yen demand prevailed but then were soon testing 106.50 and through to post 106.70. GBPJPY once again a prime mover.
EURUSD has looked wobbly but caught up in the cross play crossfire as has been the case on many occasions lately. Traders have an eye on the ECB tomorrow and there's large option interest at 1.1000 today. The pair has posted lows of 1.0982 before bouncing back above 1.1000.
AUDUSD has also found option-related demand and from a move back down through 0.7500 posted 0.7469 before a rally to 0.7490. USDCHF and USDCAD have found themselves trawling around playing follow the leader.
Light data calendar today but this market doesn't need much to make it dance on hot coals right now.
