Thursday 26th March: European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 1.40 %, Shanghai Composite gained 0.50 %, Hang Seng rose 0.30 %, ASX fell 1.60 %
  • Commodities: Gold at $1199 (+0.20 %), Silver at $17.04 (+0.20 %), WTI Oil at $51.15 (+4.00 %), Brent Oil at $58.47 (+3.85 %)
  • Rates: US 10 year yield at 1.916, UK 10 year yield at 1.496, German 10 year yield at 0.232

News & Data:

  • PBOC Fixes Yuan At 6.1375 (previous 6.1410)
  • US Sees Path To Iran Nuclear Deal By March 31 — BBG
  • US Says Saudi Arabia Starts Bombing in Yemen — NBC
  • Gulf States Excluding Oman Decided To Intervene In Yemen — Al Arabiya

Markets Update:

Oil had a strong rally after several Gulf States announced that they would begin military actions in Yemen. While Yemen is only a minor Oil producer, the destabilization of the country is seen as a threat for the whole region, especially to Saudi-Arabia, which is the world’s leading oil producer.

In FX, the Japanese Yen and Swiss Franc gained overnight, as both currencies benefited from the risk averse sentiment in markets. USD/JPY broke below the 119.20 support level and fell quickly to 118.80 as stops got cleared. The commodity currencies are also under pressure, with the Aussie dropping to 0.78 and NZD/USD back below 0.76. However, the Canadian Dollar benefited from rising Oil prices, which pushed USD/CAD to a low of 1.2470 overnight

EUR/USD and GBP/USD were rather quiet overnight. The choppy ranges are likely to persist and fading the extremes still seems like the appropriate strategy. 1.0765 and 1.1030/40 are the key levels to watch in EUR/USD, while the focus in GBP/USD is on the 1.4950-80 resistance area.

Upcoming Events:

  • 07:00 GMT – German GfK Consumer Climate (9.8)
  • 07:45 GMT – French GDP (0.1 % q/q)
  • 08:30 GMT – Swedish PPI
  • 08:30 GMT – Swedish Trade Balance
  • 08:35 GMT – FOMC Member Bullard speaks
  • 09:00 GMT – Norwegian Unemployment Rate (3.7 %)
  • 09:00 GMT – Euro Zone M3 Money Supply (4.3 % y/y)
  • 09:30 GMT – UK Retail Sales (0.4 % m/m, 4.7 % y/y)
  • 09:30 GMT – UK Core Retail Sales (0.4 % m/m, 4.1 % y/y)
  • 12:30 GMT – US Initial Jobless Claims (295k)
  • 13:30 GMT – Bank of Canada Governor Poloz speaks
  • 13:45 GMT – US Services PMI (57.2)

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