The lack of any real economic data out of the US did not help volatility’s cause and we also managed to see US equities close relatively unchanged on the day.
The Aussie and Euro were some of the key underperformers on Tuesday, with both currencies coming under pressure for different reasons. The Australian Dollar was notably weaker on the back of some softer data, fears over a cooling in China, a more reserved RBA, and most recently some M&A related selling. Meanwhile, analysts sourced the weakness in the Euro to wider Greek bond spreads which failed to narrow over the past few days along with Irish spreads. This could be a red flag for Euro bulls, with the wider spreads potentially suggesting a lack of confidence in Greece’s ability to deal with austerity. Meanwhile the New Zealand Dollar and Canadian Dollar stood out as the outperformers in the quiet session, with the mild bid tone in both currencies driven off of M&A related demand.
Overall we continue to focus on the major weekly reversals seen in the previous week that favor an eventual resumption of USD buying against most of the major currencies with the exception of the Yen. The broader instability in the global macro outlook lends support to this view and we would be looking to fade any additional USD weakness into Thursday trade. Looking ahead to the European session, German producer prices (0.1% expected) are due at 6:00GMT, followed by the Swiss trade balance (1.82B expected) at 6:15GMT. A batch of UK data is then out at 8:30GMT including M4 money supply (0.3% expected), major banks mortgage approvals, public finances (0.9B expected), public sector net borrowing (4.8B expected), and the more highly anticipated retail sales (0.2% expected). Swiss ZEW follows at 9:00GMT, with UK CBI trends (-14 expected) capping things off ahead of North America trade at 10:00GMT.
Source: dailyfx.com
The Aussie and Euro were some of the key underperformers on Tuesday, with both currencies coming under pressure for different reasons. The Australian Dollar was notably weaker on the back of some softer data, fears over a cooling in China, a more reserved RBA, and most recently some M&A related selling. Meanwhile, analysts sourced the weakness in the Euro to wider Greek bond spreads which failed to narrow over the past few days along with Irish spreads. This could be a red flag for Euro bulls, with the wider spreads potentially suggesting a lack of confidence in Greece’s ability to deal with austerity. Meanwhile the New Zealand Dollar and Canadian Dollar stood out as the outperformers in the quiet session, with the mild bid tone in both currencies driven off of M&A related demand.
Overall we continue to focus on the major weekly reversals seen in the previous week that favor an eventual resumption of USD buying against most of the major currencies with the exception of the Yen. The broader instability in the global macro outlook lends support to this view and we would be looking to fade any additional USD weakness into Thursday trade. Looking ahead to the European session, German producer prices (0.1% expected) are due at 6:00GMT, followed by the Swiss trade balance (1.82B expected) at 6:15GMT. A batch of UK data is then out at 8:30GMT including M4 money supply (0.3% expected), major banks mortgage approvals, public finances (0.9B expected), public sector net borrowing (4.8B expected), and the more highly anticipated retail sales (0.2% expected). Swiss ZEW follows at 9:00GMT, with UK CBI trends (-14 expected) capping things off ahead of North America trade at 10:00GMT.
Source: dailyfx.com
No comments:
Post a Comment