10 August 2016 at 11:50 GMT
French industrial and manufacturing production figures for June released this morning fell sharply short of expectations and confirmed that the euro area is indeed slowing down.
The news out of the US was rather cheerier - MBA mortgage applications for August 5 came out at 7.1% breaking a 3-week decline.
In FX, the USD is broadly lower as scepticism about a near-term US rate hike mounts and in equities, Europe's leading indices took a step back from yesterday's gains to trade narrowly lower.
- US: Job Openings & Labor Turnover Survey (1400 GMT)
- EIA oil & gas inventory report (1430 GMT)
- New Zealand RBNZ Official Cash Rate (2100 GMT) Expected cut to 2.00%, current 2.25%
Broad weakness seen in USD with scepticism of whether the Fed will tighten in the near future.
hovered around the tech resistance we were looking at yesterday at the 1.1148 area throughout the Asian session, but during early European trading once stops got triggered it moved swiftly higher to around 1.1183. It'll be interesting to see if we start heading back lower into the range by end of day to below 1.1148 or whether EURUSD wants to go higher to the next level at 1.1227 (100-day moving average zone) where it has been stopped twice since the start of August.
is higher as well, an idea if selling any rallies towards 1.3100 is o watch that we do not close the day higher than 1.3100. Last time 1.3100 was taken out on July 12 kept GBPUSD in a range mostly around 1.32 to 1.3350 for the rest of July.
We still like AUDUSD higher but the question is how much more at moment with a decent tech resistance coming in play around 0.7750 and then very interesting tech resistance at 0.7834 area (April 21 highs). Very nice upwards trend in AUDUSD since August 2, where today's lows around 0.7660 area are at lower end of this line, so initially preferring not to see this line broken if we see retracements. Arguments for higher AUD have been: the yields differentials and lack of guidance from the Reserve Bank of Australia.
The Reserve Bank of New Zealand's policy decision will be released tonight at 2100 GMT with expected cut of 0.25%, which should be priced in (more would be a surprise and lead to weaker NZD). If they cut 0.25% the market might find this opportunity for a supported NZD after the decision volatility (same yield logic as AUD). Tech support in NZDUSD
at 0.7166 (10-day moving average). 55-day moving average also interesting support at 0.07072 which is also around 61% Fibo from rally starting 21 July).
FX Options volatilities
EURGBP: Front end vols are very offered in a market where the focus currently is on USD movements. A lack of significant events in the calendar adds to the move lower in vols.
EURUSD: The vols have traded lower over the past sessions, but the latest move higher in the spot market has caused a renewed interest for EUR call in the front end. 1w RR has changed so they now favour EUR calls.
European stocks were slightly lower today, Germany’s DAX 30 was down 0.2% at 10,671.48 after entering bull market territory on Tuesday. CAC 40 was also pulling back today with a loss of 0.2% to 4,458.80.
Oil shares were among those struggling the most Wednesday as losses for crude prices accelerated. Among oil producers, Tullow Oil PLC lost 2.2% and Statoil ASA shed 1.1%. Oil services and equipment company Amec Foster Wheeler PLC dropped 3.1%.
Novozymes AS was another big mover today, with shares sliding 9.1% after the Danish enzymes producer cut its yearly sales outlook. E.ON SE shares slid 5.5% as the German power utility swung to a first-half net loss after it wrote down the value of assets held by its conventional power unit Uniper.
The replay of our Morning Call can be found here.
Mid-session Europe is part of TradingFloor's stable of commentary running through from the US close, through Asia to the European session. Click below to keep abreast of all the developments as they happen.
USD dented by flagging rate hike expectations. Pic: iStock
— Edited by Clare MacCarthy