Posted on: 06 January 2016, by: Pepperstone Support, category: Market Review
In today’s trade, two themes emerged: trim G10 commodity and EM currencies & sell Cross JPY. USDJPY hovered around lows of 118.20/119.25. A few moves to highlight:
EURUSD has settled near 1.0750. Next immediate support is 1.0690 (the November 25 high).
USDCAD traded as high as 1.4020 and as we type, is trying to recover to and hold 1.4000 on a closing basis.
GBPJPY fell through the 2015 lows to a low near 174.10.
On the data front, UK construction PMI bounced back to 57.8 in December, up from a 7m low of 55.3 in November. Cable paid little attention to the data.
Market expectations were essentially for a flat reading from Fonterra milk auctions. Instead, Whole Milk Prices fell by -4.4% and the Global Dairy Trade Index fell by -1.6%. NZDUSD slipped about 25pips on the data towards 0.6700 and saw further losses on broader risk sentiment.
Eurozone CPIs indeed surprised to the downside, with the headline number at at 0.2% YoY (0.3% forecast) and core at 0.9% YoY (1.0% forecast). This is the third CPI miss in the past four months. However, Eurozone employment ended 2015 on an upbeat note, with German unemployment decreasing by 14k in December versus an 8k reduction forecast (the unemployment rate remains at 6.3% as expected), and Spanish unemployment down by 55.8k versus the forecasted 50k drop.
In the US, major data included domestic vehicle sales. This rose by 13.46mn in December versus 14.15mn expected. Nikkei News also reported that a major producer of smartphones may pare down production on its latest model by nearly one-third. However, note that this could mean one of two things: demand is low or just that a new, faster, brighter electronic is in the pipeline. No one knows.