Forex news and trading headlines 22 December 2016
News:
- ECB's Weidmann says ECB shouldn't leave it too late to hike rates
- ECB: Headline CPI will pick up strongly at the turn of the year
- Euro underpinned by EURGBP and EURJPY demand
- China's SAFE says reduction in US treasury holdings is a tactical move
- BOE monetary policy called into question by Treasury committee
- Finland's Soini says Brexit talks must be handled without "revenge mentality"
- Large option expiries in play again today
- More FX option expiries of note tomorrow 23 Dec
- Option expiries for the 10 am NY cut today 22 Dec
- Nikkei 225 closes down -0.09% at 19,427.67
Data:
- Germany November import price index mm 0.7% vs 0.2% exp
- Italy October industrial orders mm +0.9% va +0.5% exp
- November 2016 Italian trade balance flash (non-EU) 3.97bn vs 3.85bn prior
- October 2016 Italian retail sales 1.2% vs 0.3% exp m/m SA
- Spain October total mortgage lending yy -3.7% vs +2.6% prev
A busy session that has seen the pound and aussie dollar in retreat with the euro on the front foot mostly as month-end flows and options make their presence felt.
We've seen a double whammy of GBPJPY selling and EURGBP month-end related demand ( talk of the BUBA shopping early) push the pound lower with cable falling from 1.2370 to 1.2328. EURGBP found an early base at 0.8440 and made a steady ascent to 0.8488 while GBPJPY fell from 145.50 to 144.90.
The EURGBP demand helped push EURUSD up through 1.0450 option expiry interest to post 1.0470 which in turn pushed EURJPY finally through offers/res at 123.00 as USDJPY found support into 117.40 but unable to rally higher than 117.75 as GBPJPY and AUDJPY selling prevailed mostly.
That supply helped push AUDUSD down to 0.7198 with large option expiry interest at 0.7200 proving to be a magnet. NZDUSD has also felt the heat from some large option interest at 0.6900
USDCAD has nudged higher to 1.3471 from 1.3420 as oil prices retreat while equity prices have generally had a soggy tone.
Data city across the pond today and whilst most of these current moves are more about natural flows we should expect any out of sync data to have some impact, if only a knee-jerk or two
