Headlines:
- Dollar stays on the backfoot in European trading
- ECB notes that wage growth expected to be ‘very strong’ in the coming quarters
- France November trade balance -€13.8 billion vs -€12.2 billion prior
- Germany November industrial output +0.2% vs +0.1% m/m expected
- Eurozone January Sentix investor confidence -17.5 vs -18.0 expected
- Eurozone November unemployment rate 6.5% vs 6.5% expected
- Friday action shows where the balance of risks lies
Markets:
- AUD leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.4%
- US 10-year yields up 2.7 bps to 3.598%
- Gold up 0.5% to $1,874.73
- WTI crude up 3.5% to $76.36
- Bitcoin up 1.8% to $17,247
It was a quiet session as markets slowly settled into the new week, with the dollar suffering from a hangover after last Friday’s drop following an underwhelming ISM services report.
Broader market sentiment remains slightly more upbeat, with European stocks gaining and US futures also posting a slight advance. Bonds were bid though, and higher yields helped to arrest the dollar’s decline early in the session as USD/JPY turned higher from 131.65 to 132.65 before easing back a little.
Meanwhile, EUR/USD is up 0.4% to 1.0690 as the pair takes another run at the 1.0700 mark. GBP/USD is also up 0.4% to 1.2130-40 levels, building on Friday’s bounce back above its 200-day moving average.
Elsewhere, USD/CAD is down to fresh lows since the end of November, falling back below 1.3400 while AUD/USD is breaking out to fresh highs since late August as buyers seek a push towards 0.7000 upon Friday’s technical break.
It’s a modest start to the new week but there will be bigger fish to fry in the coming days, with the US CPI data the catch to watch on Thursday.
This article was written by Justin Low at www.forexlive.com.
