Summary:

• Euro comes under pressure as inflationary data from the euro area surprises to the downside
• European stock markets recover putting aside slump in the US tech shares
• Oil is on the rise as OPEC meeting gets underway
• Nasdaq plans to lunch Bitcoin futures which could keep the rally going

Euro weakened against its G10 peers as the inflationary figures from the euro area came lower than expected. The bar for expectations was set quite high because of solid print from Germany. Depreciation of the common currency propped up in part European indices which shook off a slump in the US tech stocks. Moreover, oil prices moved higher as the OPEC meeting started.

Data from the euro area economy once again underlined that the booming economy does not have to translate straightforwardly into the higher pace of price growth. Even as the labour market is getting tighter, it has yet to be able to bring about a more sustained increase in inflation. According to the flash estimates of Eurostat inflation grew 1.5% yoy this month falling short of the forecast placed at 1.6% yoy but improving from 1.4% yoy seen in the previous month. On the other hand, core CPI proved to be a notch worse as it did not meet the projection put at 1% yoy coming in at 0.9% yoy. In turn, euro depreciated, the losses weren’t large though. 

Global indices took a hit as the US tech stocks sharply slumped yesterday. The US Nasdaq (US100) sliding by almost 1.3% marked the worst day in the last three months. Some argue that the selloff was sparked by just healthy profit-taking ahead of the end of the year, but there are also concerns that a “super-cycle” in memory chip demand will peak soon. Such wobbling could be a worrisome sign especially given tremendous rally without any major correction in the last 12 months. However, European stocks once again did well at the opening.

NASDAQ announced that it’s going to launch Bitcoin futures as soon as the second half of 2018. On the flip side, a NASDAQ spokesperson said that the exchange’s futures will differentiate from CBOE and CME which already announced plans to launch futures. A spokesperson also added that one issue facing  Bitcoin products is the issue of what happens if there is a ’hard fork’. However, the cryptocurrency price pulled back below 10,000 USD handle. 

NZD was the worst performing G10 currency following downbeat sentiment from the Asian session. NZ business confidence and outlook deteriorated substantially in October reflecting the uncertain political situation. Looking beyond New Zealand it’s worth looking at China where, despite quite decent PMI readings, stock markets have declined.

Besides the OPEC meeting we’ll get inflationary figures from the US, thus EURUSD also could take a wild ride. It’s also worth mentioning that the US Senate may be voting on the tax reform – any progress on that field should support USD and US stocks.