Forex news from the European morning session 8 Feb

News:

  • ECB's action is a key tool for the Eurozone says Italy's Padoan
  • Low prices are here to stay says worlds largest oil trader
  • Bank of France forecasts Q1 GDP of +0.4%
  • Party time in Europe as the SRM gets ratified by Eurozone members
  • December 2015 OECD leading indicator drops to 99.7
  • Cable gets lashed around again 8 Feb
  • Europe has the Monday hump as stocks tumble and players go running for the yen
  • Aussie$ also feeing the yen grab backlash
  • Option expiries 10am NY cut today 8 Feb
  • More option expiries of note this week 8-12 Feb
  • Nikkei 225 closes up +1.10% at 17,004.30

Data:

  • February 2016 Eurozone Sentix index 6.0 vs 7.6 exp
  • Spain industrial output Dec yy NSA +2.9% vs +6.0% prev

The week has got off to another fragile start as oil and equities have both been on the backfoot as traders fail to find any good news.

It all started of slowly enough with European equity markets opening a little firmer helped by firmer Nikkei and oil trading off its lows but then a dark reality check returned and down we came in a steady flow washing away support points on currency pairs across the board.

The US jobs data had some strength in the detail so markets could be forgiven for erring on the side of caution as US interest rate hikes return to the table. Either way we saw euro demand and EURUSD rally to 1.1184 as equities fell and that in turn capped GBPUSD after an early look at 1.4550 as EURGBP rose to challenge 0.7700.

Meanwhile USDJPY was also in retreat on safe-haven, cheap funding, plays and we were soon enough through 117.00 again having failed around 117.50. It didn't stop there though and as JPY demand outweighed EUR demand we saw EURJPY tumble through 130.50 support and that has triggered falls in both those core pairs to 116.40 and 1.1112

Cable has needed little excuse to keep falling and with the added GBPJPY supply has now posted 1.4397 in rapid time having breached support around 1.4450. AUDUSD too has been in retreat to 0.7070 from 0.7128 as AUDJPY got slapped from 83.50 to 82.20

Brent has fallen to $33.25 from $34.60 with WTI making similar size losses to test $30.00 again. USDCAD has rallied strongly but finding a few offers all the way up from 1.3840 to 1.3926

DAX has posted lows of 9016.47 falling over 3% from a +0.5% opening and the rest of Europe has been following it down.

Data wise its been a quiet morning and we've only Canadian housing starts of any note for the rest of the day but these markets are firmly focussed on the bigger picture, and that picture looks very fragile right now.