RECAP

The movement from yesterday has been set as the markets continued in the proven trend. The U.S. equity futures climbed through the Asian and European sessions with the Nasdaq continuing to outperform. The European equity markets moved higher supported by autos and mining stocks for the second day in a bounce from tariff-fear-related lower levels.

The USD was marginally weaker across the Group-of-10, with the EUR/USD holding close to the 1.17. The SEK spiked lower after the domestic CPI missed estimates which put further pressure on the Riksbank forecast of a possible December rate hike.

Further focus on heavy selling in the December 19 Eurodollar futures, as EDZ8/Z9 hits new steep levels of this cycle with OI continuing to build. U.S. Treasuries pressured with curve bear flattening slightly.

In the key headlines for the European session:

  • BOE’s Carney: warns BOE would be unable to cut interest rates to offset the economic impact of a no-deal Brexit; no-deal Brexit would probably see interest rates rise rather than fall
  • Eurozone 2Q Labour Costs: 2.2% vs 2.1% prev.; Wages 1.9% vs 1.8% prev.
  • Italy Deputy Finance Minister says minimum amount for the citizen’s income will be EU780 and will begin Jan. 1: La Stampa
  • Sweden Aug. CPI y/y: 2.0% vs 2.2% est.; CPIF 2.2% vs 2.3% est.
  • China Aug. Retail Sales 9.0% vs 8.8% est.; Industrial Output 6.1% vs 6.1% est.; Fixed-asset Investment 5.3% vs 5.6% est.

OUTLOOK

The European session is taken over by the American one, as the last day of the week offers some volatile conditions from the European session as the Carney finishes up his speech and the Russian Central Bank deciding to increase the interest rate to 7.5%.

The U.S. session will have some Economic figures on the agenda for today with Retail and Core Retail Sales. Those two figures are probably going to be the focus of investors for the upcoming session.

What’s more, the Federal Reserve Bank of Chicago President Charles Evans (who is considered to be a moderate dove) and Federal Reserve Bank of Boston President Eric Rosengren (who is considered to be a moderate hawk) are due to speak.

TRADERS VIEW

The euro rose to its strongest level versus the dollar in more than two weeks amid improving risk appetite and dollar weakness after soft U.S. inflation data on Thursday. The Bloomberg Dollar Spot Index headed for its worst weekly performance since mid-February as the U.S. curve flattened and euro-area stocks rose. The krona led losses among G-10 peers as Swedish inflation missed estimates, while emerging-market currencies extended their recent advance.

EUR/USD – Hits a near two-week high to ascertain bullish momentum yet strong resistance at 1.1740-50 lurks.

GBP/USD – Close Friday above 1.3150 (weekly Bloomberg Trender Indicator) establishes a bullish trend; at bar 6 on daily DeMark sell setup, nine-day RSI at overbought levels yet still to signal exhaustion; trades above the cloud first time since April as 21-DMA steepens.

USD/JPY – Hits six-week high as it escapes from cloud gravity and momentum studies still stay at neutral levels.

AUD/USD – A short-term bottom seems to be in place, 21-DMA resistance in focus.

EUR/GBP – Trendstall suggests a fresh bearish trend may be in the making; 55-DMA defines upside for now.