Forex news and trading headlines 26 Jan 2016
News:
- UK's Hammond: There may be trouble ahead
- Article 50 legislation White Paper to be debated in parliament on 31 Jan
- ECB's Mersch says QE may have some negative effects on the repo market
- China's SAFE will strengthen monitoring of cross-border capital flows
- China's Li says his country offers an anchor of stability and growth in an uncertain world
- Standard & Poors affirms China ratings at AA-/A-1, Outlook remains Negative
- Spain's Rajoy says Le Pen victory in France would be a "catastrophe"
- 2016 physical gold demand fell 20% to 3,349t - GFMS
- Turkey's Canikli says low point in economic fluctuations has passed
- US dollar takes a leap of faith
- Will the euro break out of its range?
- Option expiries for the 10 am NY cut today 26 Jan
- Nikkei 225 closes up +1.81% at 19,402.39
Data:
- Q4 2016 UK preliminary GDP 0.6% vs 0.5% exp q/q
- January 2017 UK CBI distributive trades sales -8 vs 22 exp
- UK BBA December mortgage approvals 43.23k vs 41k expected
- Spain Q4 unemployment rate 18.63% vs 18.7% expected
- Germany February GFK consumer sentiment 10.2 vs 10.0 exp
- Switzerland December trade balance CHF +2.72bln vs +3.5bln prev
A strange session that started rather quietly, had one real burst of life then settled down again with traders either banking some quick pips or licking their intra-day wounds.
Early USD demand was led by USDJPY spiking through 113.50 to test 113.80 which in turn sent GBPUSD down to 1.2625 from 1.2660 and EURUSD to from 1.0740 from 1.0760. When that ran out of steam we saw GBP demand into the UK Q4 flash and new session/6-week highs for GBPUSD of 1.2672 and EURGBP down through 0.8500.
A case of buy rumour/sell fact though with the good/better data already priced in as per my preview and with USDJPY jumping up again to take out 114.00 offers /res we saw GBPUSD tumble to 1.2592 and EURGBP back up to 0.8510 from 0.8471.
EURUSD once again has found itself caught up in the cross-play crossfire of EURGBP and EURCHF selling vs EURJPY demand.
Equities opened strongly but failed to advance much further. Govt bond yields were in good form and the rally helped underpin USD demand which has meant USDCAD rallying back through 1.3100 from 1.3055 but USDCHF has failed to take full advantage with EURCHF having a look below 1.0700 again and no sign of the SNB.
AUDUSD range has been a little tighter on cross flows albeit in a general retreat to 0.7538 from 0.7570
US services PMI and new home sales to come but these markets understandably data focussed right now with much more to consider on both sides of the pond.
