Forex news and economic trading headlines 1 August 2016
News:
- EY ITEM Club slashes UK 2016 GDP forecast to 1.9% vs 2.6% prior
- UBS rogue trader who lost $1.9bln says " it could happen again"
- GBPJPY selling sends core pairs lower again
- "Mr Yen" Sakakibara says Abe stimulus plan won't have a major impact
- Japan's Shirai says it's better for BOJ to wait until December
- Dallas Fed's Kaplan says a September rate hike "very much on the table" if data supports
- SNB's Jordan says current policy approach is the right one
- Iran's Zanganeh says oil market over-supplied but balance is expected
- China's outstanding MLF at end-July 1.70 trln yuan vs 1.75 trln prev
- RBA to disappoint and AUDUSD will go above 0.80 - Citi
- Option expiries 10 am NY cut today 1 August
- Nikkei 225 closes up +0.40% at 16,635.77
Data:
- July 2016 UK Markit CIPS manufacturing PMI 48.2 vs 49.1 exp
- Eurozone Markit mftg PMI July final 52.00 vs 51.9 exp
- Germany Markit/BME mftg PMI July final 53.8 vs 53.7 exp
- France Markit mftg PMI July final 48.6 as exp
- Italy Markit/ADACI mftg PMI July 51.2 vs 52.5 exp
- Spain Markit mftg PMI July 51.0 vs 51.5 expected
A busy week ahead and it's begun with the pound on the back foot again.
Having found support at 1.3200 in Asia after failing at 1.33300 again in NY we had seen cable bounce to 1.3262 in early trading but as EURGBP demand increased we saw a dip to 1.3240 then 1.3220 when out came the soft UK mftg PMI data.
Cue a fall to 1.3180 having wiped its feet at 1.3200 again and a brief rally to 1.3200 again saw GBPJPY selling emerge knocking both core pairs lower as 135.00 broke triggering stops. Lows so far 1.3163 ahead of decent support into 1.3150 and 102.15 before both found buyers again.
Yen focus is on tomorrow's fiscal stimulus package by Abe but we've seen general demand ahead of the event with traders not wanting to get caught short a la BOJ.
Equities opened in positive mood giving the euro a little knock lower from 1.1184 highs but that was short lived and as equities retreated we saw dip-demand on the funding ccy correlation.
CHF pairs got a short-lived lift on Jordan's comments but the rallies were quickly sold into while AUDUSD and NZDUSD have also been on the back foot after the USD and JPY demand. USDCAD has enjoyed a decent session on lower oil prices only to cap once again at 1.3080 as oil found bases.
US mftg PMI and ISM data coming out over the pond to keep things ticking over but today really is the warm-up act for what lays ahead.
