Oil has hit a 15-month high on the back of optimism over the Opec deal which needs to be sorted out by November 30. But, with a record long position building across the combined benchmarks, a disappointment could leave some exposed. Full report to come within the hour....
Article / 08 August 2016 at 11:41 GMT

Mid-session Europe: Stocks gaining, FX sleepy in post-NFP glow

Saxo Markets


Foreign exchange

German industrial production month-on-month was stronger than expected at 0.8% vs 0.7%, reversing the decline from May. FX markets are having a quiet start to the week with USD strength dominating following the strong NFP on Friday. In equities, a rally led mainly by basic material and financial shares has pushed UK and European indices into positive territory.


  • Canadian June Building Permits (1230). Expected at 1.5%, Prior -1.9%         

Forex developments

A quite day so far, with USD strength dominating following the strong NFP on Friday. In EURUSD the better than expected nonfarm reading pushed the pair below its 200-day moving average at the 1.1076 area, but we closed Friday exactly above the 200-day moving average. A close of day lower opens up for 1.100 where there is decent tech support at 1.1000. In a week with little US releases of note (retail sales on August 12 being the main item) other releases might not be enough to push it strongly below 1.100. Topside we have resistances at the 55-day moving average which is at 1.1149 , where EURUSD struggled to close above that level throughout July until July 29. 

USDJPY has found support following nonfarm payrolls on Friday and is trying to take 102.38 area, which was the high close reached last week following the Bank of Japan meeting and collapse of USDJPY, so positive if we can close the day higher. 103.28 38% Fibo tech resistance level from drop starting July 21. The 102 area has been tech support for today.

AUDUSD: we have liked the AUD higher and has so far held at the tech support at 0.7600 area after the USD strength. AUD might be losing the momentum higher unless we break the 0.7675 area soon. AUDUSD has really struggled to close above 0.7630 since May, so it could be a positive move that this happens if we close higher than 0.7630. Main technical support 0.7490 (100-day moving average).  

FX Options volatilities
The options market continues to be offered. A lack of important news on this week's agenda is keeping buyers on hold.
USDJPY 1-month is now trading 9.6 down from 12.5 Wednesday evening. The only buying interest has been for event days like US election day and the Federal Open Market Committee meeting in September.
NZDUSD 1-week still very high due to the Reserve Bank of New Zealand event this week.
EURUSD slightly better bid 1m-3m while shorter dated is better offered.
Main focus is still to keep decay bill as low as possible and be ready to be long vega going into September.

Fixed income



European equity indices rose on Monday with the UK’s FTSE 100 traded up 0.4% to 6,818.85 and the DAX gained 1% to 10,460.92. The rally is mainly led by basic material and financial shares. Equities continued to get a lift from an aggressive monetary stimulus package from the Bank of England.
Mining shares are taking in stride downbeat economic data from China, a key consumer of precious and industrial metals. Anglo American PLC rose 2.5%, iron-ore producer BHP Billiton PLC gained 2.2%, and copper company Antofagasta PLC picked up 1.8%.
July trade data from China were disappointing with exports slid 4.4% from a year earlier, suggesting overseas shipments are dragging on the world’s second-largest economy. Exports were expected to decline 3.6%. Imports last month fell 12.5%, more than an estimated 8.9% decline.
Other movers on Monday included Barclays PLC, with shares of the lender up 3.5%. On the downside, Hikma Pharmaceuticals PLC fell 2.9%.

The replay of our Morning Call can be found here. 

Join our Weekly OptionsLab on Wednesday  to find out more on covered call strategy.

Read more

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.

US:        US Market Wrap: Insert links and headlines from the latest TF stories

Asia:      Morning Report APAC: Strong NFP report boosts USD and equities

Europe: Morning Markets: Nikkei leads equities charge

Europe: From the Floor: Oil short nearing January high


A rally led by basic material and financial shares has sent European and UK indices higher.
Pic: iStock

— Edited by Clare MacCarthy

The Global sales Trading desk is a multi-asset team providing customised trading solutions


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