24 February 2017 at 12:45 GMT
The dollar continues on its descent against the yen following US treasury secretary Steven Mnuchin's comments which left many fearing president Donald Trump's expected policy announcements to Congress on Tuesday will not be all they hoped. Meanwhile, gold's skyward trajectory appears to be continuing unimpeded, up $14/oz on where it was 24 hours ago.
In Europe, stocks have fallen, led by losses among basic materials, oil and gas and financial stocks – although the euro appears to be recovering from the downward funk it found itself in at the start of the week.
Watchlist (all times GMT)
- Canada CPI NSA month-on-month for January (1330) – expected at 0.4% vs prior -0.2%
- Canada CPI year-on-year for January (1330) – expected at 1.6% vs prior 1.5%
- US new home sales for January (1500) – expected 571,000 vs prior 536,000
- University of Michigan February (1500) – expected at 96.0 vs prior 95.7
EURUSD boosted to 1.0604 early on stop hunting. Meanwhile, USDJPY remains focused on the downside and has reached 112.31 from 112.96, with the 100-day moving average coming in at 111.71 area.
China says it has no intention of using currency devaluation to its advantage. Germany says it is unsure of Trump’s trade stance, but is keen for US talks.
FX Options volatilities
Volatility in all majors is lower this morning.
EURUSD: Curve is down. One-month is down 0.5% and all short-dated interests have been sellers today, except for one buyer of two-week at 1.0560, which was filled quickly.
USDJPY: Same story with volatility lower, where one-month is down 0.55%. We saw one buyer of three-month at the money against selling 4-month at the money in 500 million ag vega.
Other pairs saw nothing important trading, but curves are lower and quoted offered.
Stocks in Europe fell, led by losses among basic materials, oil and gas and financial stocks. RBS and BASF were dragged lower after financial results, leaving the market to lose some altitude after hitting 14-month highs this week. At midday, the Dax 30 fell 1.1% and the Cac 40 lost 0.6% while the UK’s FTSE 100 declined 0.6%.
Looking ahead to next week, risk events may come with Federal Reserve chief Janet Yellen’s speech and US president Donald Trump’s appearance in a joint session of Congress.
In France, Vivendi dropped 4.5% following reports that Italian prosecutors have opened an investigation of chairman Vincent Bollore over alleged market manipulation through the media company’s accumulation of a stake in Italian broadcaster Mediaset. Mediaset shares were down 1.4%.
BASF fell 3.2% after the German chemicals heavyweight said it is “cautiously optimistic for 2017.” The company posted a rise in fourth-quarter net profit of €689 million, above expectations of €624 million.
Royal Bank of Scotland fell 3.2% after the 70% UK-owned lender said its annual net loss had more than tripled to £6.96 billion after it put aside billions of pounds to cover conduct issues.
British Airways parent International Consolidated Airlines rose 2.4% after the group posted a 29% rise in net profit and announced a €500 million share buyback ($529.7 million), in a sign of improving profitability.
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.
The dollar has taken a tumble as investors grow nervy about US president Donald Trump's impending policy announcement. Photo: facebook.com/DonaldTrump