FX News
European Outlook: The global sell off in tech stocks continued in Asia, Japanese markets managed to outperform, underpinned by financials and the Nikkei managed a gain of nearly 0.6%, but the Hang Seng dropped 1.5%, the CSI 300 1.3% and the ASX declined 0.69%, after the government announced an inquiry into banks. South Korean listed shares dropped after the central bank hiked interest rates. UK100 futures are heading south, U.S. futures are narrowly mixed. Data releases in Europe include Eurozone jobless numbers and most importantly preliminary Eurozone HICP readings for November.
Sterling continued has extended its ascent into a third day, with Cable punching out a fresh two-month high of 1.3480 and EURGBP plumbing a three-week low. Reports continue to point to a deal-in-the-works between the EU and the UK on the final financial settlement, and there is also raised hopes that an agreement will be made on the Irish border issue (and so avoid the spectre of a Dublin veto). Elsewhere, EU-USD has remained buoyant, although has thus far remained below yesterday’s peak at 1.1882. USDJPY rose for a third straight session, logging an 11-day peak of 111.24. This is the biggest rebound the pair has seen in four weeks, marking a break in the down phase that’s been in place since November (both breaking above and closing above trend resistance yesterday). Strong gains have also been seen in EURJPY, which is up nearly 1% over the last day, along with GBPJPY, which has surged by nearly 2% over the last two days. The yen, which is generally regarded as the safe haven currency of choice, has clearly not been in demand despite the haemorrhage in tech stocks over the last day, and concerns about North Korea’s ongoing development of ICBM capability.
Main Macro Events Today
EU CPI – Expectations – rise by 0.2% for November from 0.9% seen in October.
EU Unemployment Rate – Expectations – Unchanged at 8.9% for October
US Unemployment Claims and PCE – Expectations – Unemployment Claims expected at 240K from 239K seen last week, while core PCE expected to rise to 0.2% m/m from 0.1%.
Last day of OPEC meeting
Charts of the Day
Support and Resistance Levels
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Big tech rebound ahead of earnings, Oil slips
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Tesla and Google are due to report earnings today after the bell, and their results could shift the wind in either direction. Despite almost doubling its stock price between April and July, Tesla sees appetite for its cars and its market share under pressure.