Article / 10 October 2016 at 11:35 GMT

Mid-session Europe: Stocks gently in the green, FX calm

Saxo Markets


Foreign exchange
European markets are slightly in the green this European session with little major news. In data releases, Germany's trade surplus for August was €20.0 billion versus an expected €19.5bn. 

Less important releases saw German exports month-on-month solid at 5.4% vs. 2.2% expected, while imports were up 3.0% versus 0.7% expected .

Finally, Norwegian CPI month-on-month was 0.3% versus an expected 0.6%, while the year-on-year increase was 3.6% versusexpected 4% .

  • No economic releases of note out of US today   

Forex developments

A generally calm FX session in most of the majors first half of Monday.

GBPUSD seen weaker in the morning, touching 1.2365. Currently back to above 1.24 remaining well away from Friday’s crash lows.

USD Index has shown a decent bounce from 96.5 reaching 96.75, which put the greenback on the strong side in most of the crosses. USDJPY currently breaching 103.25 (daily +0.3%), EURUSD struggling around 1.1170, making it -0.3% during the day.

USDCNH traded on 6-year maximums as Chinese markets reopened after a week-long holiday and the PBoC set the national currency softer. Current levels - above 6.71.

A strong rally seen in Mexican peso, with USDMXN sliding below 19.00 on Hillary Clinton looking more favourable in the second round of the US presidential debates.

FX Options volatilities

Japan and US holiday today keeping the market sideways.

Volatility is in general offered. We have seen selling interest in EURAUD for 15 Dec 1,5550 and 6-month 25 delta EUR calls. EURJPY is also dominated by selling interests.

GBP has stabilised and volatility slowly getting sold again but probably the market needs one more trading day to confirm new range, so this level of 11.75-12.0 % - month will probably hold today but would expect it lower if we see spot trading higher than 1.23 tomorrow.

Relatively few important news items on this week's calendar should also increase selling pressure.

Fixed income





European stocks struggled Monday, led by losses among banks, utilities and healthcare stocks. But gains for telecom and consumer goods shares helped limit the losses. CAC 40 was up 0.1% at 4,543, and DAX 30 was 0.2% higher at 10,508, before the start of Q3 earnings season. The FTSE 100 was off 3 points, as a lower pound has been aiding the FTSE 100, which is heavily weighted by multinationals, such as miners, that have large overseas sales.

In Germany, Deutsche Bank was yanked down 3.2%, as disappointment set in that the bank has not yet reached a settlement with the US Department of Justice over issues related to the selling of mortgage-related securities. German newspaper Bild this weekend reported the bank’s chief executive, John Cryan, was not able to secure a deal while he was in Washington late last week.

RBS was pushed 2.8% lower after reports of leaked documents appearing to show the London-based bank pushed small-business customers into financial difficulties in pursuit of profit. RBS has denied the allegations, telling the BBC that a review had found no evidence that the bank deliberately caused businesses to fail.

Still in the UK, EasyJet was dragged to the bottom of the FTSE 100, losing 3.6%. The budget airline last week warned that the pound’s slide since the June Brexit vote is eating into its earnings

In France, Vivendi SA shares rose 1% as French billionaire Vincent Bollore increased his stake to more than 20% of the media conglomerate through his family-controlled group.

In Italy, Salvatore Ferragamo SpA fell 2.4% after Goldman downgraded the Italian fashion house to neutral from buy.

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

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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.

Asia:      Morning Report APAC:   Market awaits Trump-Clinton 

Europe: Morning Markets: Knives come out at second US debate

stock exchange  European stock markets (Britain included) are having a mildly positive session. Pic: iStock

— Edited by Clare MacCarthy

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


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