Forex Afternoon Wrap – 13/10

GBP dives on UK inflation data

• UK BRC retail sales monitor y/y 2.6% vs. -1.0% previously
• BoJ releases monetary policy meeting minutes
• Japan Bank lending y/y 2.6% vs. 2.7%
• Australia NAB business confidence 5 vs. 1 previously
• China trade balance 60.3bn vs. 46.9bn
• Japan consumer confidence 40.6 vs. 41.6
• Japan prelim machine tool orders y/y -19.1% vs. -16.5% previously
• Germany final CPI m/m -0.2% vs. -0.2%
• Germany WPI m/m -0.2% vs. -0.2%
• Switzerland PPI m/m -0.1% vs. -0.1%
• UK CPI y/y -0.1% vs. 0.0%; Core CPI y/y 1.0% vs. 1.1%
• UK PPI input m/m 0.6% vs. 0.2%; PPI output m/m -0.1% vs. -0.2%
• German ZEW economic sentiment 1.9 vs. 6.8
• Eurozone ZEW economic sentiment 30.1 vs. 30.1

Later

• MPC Member Haldane speech
• RBNZ Governor Wheeler speech

The Asian trading session got off to a busy start with the markets focused on Chinese trade balance data and the BoJ minutes. While trade balance numbers were positive, it was a soft print leading markets to seek the safe haven Yen. The Asian equity markets were mixed as the Nikkei225 closed -1.11% lower. The Shanghai stock index gained 0.18% and the Hang Seng was down -0.57%. The Yen surged in early trading on BoJ’s minutes and is currently up 0.25% for the day against the Greenback despite staying range bound. Consumer confidence data from Japan eased back to 40.6, below estimates of 41.6 while the preliminary machine tool orders declined -19.1%, from -16.5% previously.

The Aussie which surged strongly in the past week gave back its gains despite the NAB business confidence rising to 5, from 1 previously. The Aussie is down -0.92% against the Greenback while the Kiwi was soft with -0.32% to the dollar.

The European trading session opened on a positive note with news from the UK that brewery companies Anheuser-Busch InBev was nearing a takeover for SABMiller Plc. The European equity markets however gave way with the German DAX down -1.36% and the FTSE100 down -1.01% at the time of writing.

The British Pound saw early gains which took the Cable to session highs of 1.5369, but the Cable soon gave way as UK’s inflation numbers posted a weak print, falling -0.1% on the headline and rising 1.0% on the core CPI annualized. GBPUSD is down -0.77% at the time of writing, trading near 1.52 at the time of writing.

Data from Eurozone included the German CPI numbers showed inflation in Europe’s leading economy fall -0.2% on the headline while the wholesale price index also fell -0.2%. The Euro initially surged to the highs of 1.14 but with prices being rejected, the EURUSD was trading at 1.137 but remains biased to the upside, trading above the support of 1.1348.

The US trading session is looking for the equity markets to open lower with the Dow futures currently down -0.47% and the S&P500 futures down -0.51%. The NASDAQ futures were also lower -0.62% ahead of the US equity markets open. There are no major economic releases from the US today but the Greenback is staging a turnaround after declining for the previous couple of days.

The commodity markets are mixed with Crude oil posting soft gains of 0.04%, trading at $47.12 and Gold futures down -0.68% trading at 1156.