Forex news and economic data headlines 12 October 2016

News:

  • UK's May: Parliament has an important role to play in Brexit
  • UK could still find itself making payments to EU even after Brexit
  • Timings for today's Brexit debate in UK parliament
  • Forget the last 15 hours in the pound and we're unchanged
  • More on that May Brexit debate climbdown
  • Here's why you shouldn't be too quick to buy into May's U-turn on Brexit
  • Pound slides again as European traders say thanks for the Asian rally
  • BOE's Cunliffe says underlying trend for the pound is still down
  • More from Cunliffe: Markets find political uncertainty hard to process
  • BOJ's Harada says it's desirable to steepen an excessively flat yield curve
  • More from Harada: BOJ will keep buying JGBs at current pace
  • Even more from Harada: Doesn't think BOJ needs to ease further at next rate review
  • ECB's Coeure says negative rates are a net positive for European banks so far
  • ECB's Coeure firmly believes Greece will reap the benefits of programme by the end
  • SNB's Zurbruegg says franc still significantly over valued
  • OPEC report: Secondary sources say output rose by 220kbpd in September
  • Option expiries for the 10 am NY cut today 12 Oct
  • Nikkei 225 closes down -0.93% at 16,867.36

Data:

  • Germany wholesale price index Sept mm +0.4% vs -0.7% prev
  • France CPI Sept final mm -0.2% as exp
  • August 2016 Eurozone industrial production 1.6% vs 1.5% exp m/m
  • US MBA mortgage applications -6.0% vs 2.9% prior
  • October 2016 Swiss ZEW investor sentiment 5.2 vs 2.7 prior
  • Japan machine tools orders Sept final yy -6.3% vs -8.4% prev

All attention on the pound in the wake of a sharp spike in Asia on an apparent Brexit vote U-turn by UK PM May, but not was all as it seemed.

Asian trading had seen highs of 1.2326 for GBPUSD and was holding around 1.2300 in early European trading but it didn't take long for it to get a slap lower and we saw a quick dip to 1.2229 with EURGBP rallying to 0.9036 from 0.8995. Cue GBP buyers/profit-taking and we were just as quickly back testing 1.2300 and 0.8990 again.

Euro selling was a general theme which saw EURUSD continue its journey lower to 1.1031 helped by USD demand as USDJPY rose above 103.60 and USDCHF had a look at 0.9900

EURUSD then tried to get above 1.1050 again helped by cross demand but it didn't take long for it head down to 1.1010 as EURGBP and EURJPY anchored which saw GBPUSD also head lower again to 1.2240 as more info on May's apparent change of heart on today's Brexit debate conditions began to appear. Comments by BOE dep gov Cunliffe did little to erase the gloom.

Meanwhile AUDUSD, NZDUSD found themselves in retreat on the USD demand while USDCAD has found itself underpinned by softer oil and option expiry interest at 1.3200

Equities have turned positive albeit struggling to make much headway.

Focus now turns to the FOMC Minutes but the pound won't be far from the headlines.