Forex news from the European morning session 18 Marc

News:

  • ECB's Praet says they may cut deposit rate further if needed
  • Russia holds key interest rate at 11%. Says inflation risks remain high.
  • China's Li says government will ensure the major targets for 2016 are met
  • RBA and BOJ sign an AUD20bln swap agreement
  • The mystery of the missing 800k barrels of crude oil each day
  • Oil price possibly rising to $47 per barrel by June says BOA Merrill Lynch
  • Early USD demand finds sellers waiting again
  • Pound looked for a reason to stay up but came up empty handed
  • Option expiries 10am NY cut today 18 March
  • Chinese equities close firmer 18 March
  • Nikkei 225 closes down -1.25% at 16,724.81

Data:

  • Germany PPI Feb mm -0.5% vs -0.1% exp
  • Eurozone Q4 labour costs YY +1.3% vs +1.5% exp
  • France Q1 wages QQ final +0.1% as expected
  • Spain labour costs Q4 yy +1.2% vs +0.3% prev
  • Japan nationwide department store sales Feb yy +0.2% vs -0.2% prev

After yesterday's fun and games it appears everyone including the algos took to the sauce afterwards as today's session saw a far more subdued and sober tone.

Understandable as markets still try to decide whether this week has been defining water-shed moment following the FOMC's revised position/caution and we've seen some USD demand again only to run into sellers at key levels.

EURUSD has drifted down from 1.1310 to look at the 1.1250 support and similarly GBPUSD been down to test 1.4400 from 1.4450 only to bounce back.

USDJPY has consolidated above 111.00 and the bounce in other core pairs has helped yen pairs generally move higher again.

Oil had an early wobble sending USDCAD to 1.3032 from 1.2980 only to then firm again to new session highs sending USDCAD back to from whence it came.

AUDUSD and NZDUSD both had their own move lower on the early USD demand but both pairs needed little excuse to move higher again after lows into 0.7600 and 0.6800.

Nothing on the US data horizon but two dovish Fed speakers on the agenda later. Canada is the data provider with retails and CPI at 12.30 GMT.

It's been a session of contained ranges but not without opportunity and we should expect more before the day is out.