18 October 2016 at 11:24 GMT
Today's trade sees sterling a little higher on a strong inflation print that itself largely came down to post-Brexit sterling weakness. In the US, the greenback is seeing a spot of profit-taking on yesterday's weaker industrial production numbers.
The US earnings season is also kicking into high gear with expectations high for Netflix shares in today's New York session following a stunning earnings beat.
Reporting today are Goldman Sachs, Philip Morris International, Johnson & Johnson, and Harley-Davidson, among others.
- US September CPI (0.3% m/m, 1.5% y/y expected; 1230 GMT)
- US October NAHB Housing Market Index (1400 GMT)
- Weekly API Oil Inventories (2030 GMT)
USD index erasing some of the gains seen over recent weeks following soft US industrial production numbers Monday. Currently locked in the middle of the 97.5-98 range.
EURUSD traded in the narrowing daily diapason, holding above 1.10 with the European Central Bank meeting coming on Thursday receiving more and more of the market's focus. USDJPY stayed within its recent range during the morning hours, currently attempting to break below 104. Nearest support line seen in previous resistance level at 103.5. GBP is trading 1% higher versus USD on the UK September inflation data beating market expectations. Attempt to breach above 1.23 is seen in the recent minutes, potential resistance of 200-hour EMA at 1.232. Talks of some of the short-covering being in place...
Commodity currencies: Both AUD and NZD are big market gainers during the day (0.7% and 1% to USD respectively). RBA minutes published earlier in the morning show a consensus forming around improvements in economic growth.
FX Options volatilities
Vols are ticking lower in the overall currency space. GBP vols are still at very elevated levels with one-month GBPUSD ATM trading five vols above EURUSD.
Frontend GBP vols have been sold a bit today after the UK CPI number did not take the market by surprise to any major degree.
One-month EURUSD is trading at its lowest since expiry rolled to include the US election.
European markets bounced back with commodity-related stocks leading the market higher as the dollar slipped from seven-month highs while sterling strengthened after data showed UK inflation rose by its most in more than two years last month.
The FTSE 100 rose 1.07% to 7,021; the CAC40 was up 1.21% to 4,503; the Dax gained 1.19% to 10,628; and the IBEX35 was up 1.03% to 8,829.
Shares of Rio Tinto, Randgold Resources, Fresnillo, Royal Dutch Shell and BP rose between 1.2 and 2.2 %
On the downside shares, of Bureau Veritas fell 4.5% after the company cuts its outlook for full year 2016.
Wall Street stock futures point higher as investors wait for inflation data (0.3% expected versus 0.2% prior, m/m) and earnings from several corporate heavyweights such as Goldman Sachs Group, Philip Morris International, Johnson & Johnson, and Harley-Davidson Inc.
Shares of Netflix are expected to fly in premarket after the streaming video firm's results busted Wall Street expectations .
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.
"Let's watch something about making lots of money". Photo: iStock
— Edited by Michael McKenna