Summary:
- Antipodean currencies lead the losses in the G10 basket while the US dollar is delicately higher
- Stocks in Europe trade flat, the Spanish IBEX (SPA35 on xStation5 platform) gains as much as 1%
- Bonds remains subdued, the US 10Y yield trades still below 2.4% following the tax reform revelations
The Antipodean currencies have been on the back foot in the G10 basket following sluggish prints regarding Chinese PMIs as well as another remarks from the new NZ finance minister concerning the NZD ex-change rate. At the time of writing the NZD is losing 0.5% whereas its counterpart from Australia is going down 0.4%. Additionally, the Swiss franc and the Norwegian krone are losing steam as well but no news have been reported as of yet. The yen has been barely changed thus far despite the BoJ meeting which saw another downward revisions to inflation projections making the BoJ objective yet more elusive. The US dollar index is subtly rising 0.05% as investors are bracing themselves for major releases later this week.
On the flip side, the US dollar might be under slight pressure in the upcoming hours as a verdict related to the new FED’s chair is scheduled to come in on Thursday. Although market participants seem to convince that Jerome Powell will take the helm of the Federal Reserve, some nervousness might be experienced which could be lifted by oncoming revelations with regard to the tax reform across the pond. Let us remind that the major US indices made a U-turn yesterday in the aftermath of a Bloomberg report that republicans are considering a phase-in approach for tax cuts. As a result, the US 10Y yield lost some of its momentum and now it’s trading below 2.4%. Besides, the bond market across the developed economies is sliding a bit.
Taking a quick look at the European stock markets one may notice that IBEX is stacking definitely the best against its peers adding as much as 1% to its valuation (being propped up by the Catalan thread as the Spanish Constitutional Court canceled the Catalans’ declaration of independence) while others lag behind. Bear in mind that there is a holiday in Germany so the DAX is closed today.
The latest data from the Eurostat revealed that inflation across the euro area slowed down this month from 1.5% yoy to 1.4% yoy while the market consensus had pointed to the unchanged value.Notice that weaker readings from Germany and Spain dragged down the inflation rate in the whole European economy while France managed to bump up its pace. By and large, the euro could be susceptible to a short-term pullback but in the longer-term it ought to move north.
Over the course of the latest hours the oil market has been continuing its bullish momentum being supported by fresh news pertaining to the upcoming OPEC meeting in a month as both Russia and the Cartel itself seem to be on board when it comes to a deal extension. On top of this, the Kurdish thread settled down as we wrote more about it on Friday. Now take a closer look at a technical analysis.
Major cryptocurrencies have been on the sidelines recently following a fresh high seen on Bitcoin during the weekend. Since then the price has settled down but higher levels might be still on the cards. Let’s begin today’s analysis with the story from Iran where the government has been conducting research into the economic and infrastructural aspects of preparing for Bitcoin use in its country.
Tuesday is packed with many relevant releases where those for the commodity-related currencies might prove to be the most crucial. We’ll get the monthly GDP print from Canada while the BoC’s head Poloz is expected to speak as well. Besides, the NZ dollar will be equipped with another significant data as the jobs report will be released tonight.