CPI on Watch
USD has been under pressure over the European morning on Thursday with the index softening from yesterday’s highs to trade 98.54 last as equities have enjoyed better levels. Though the datasheet for the US has been quiet over the week so far, today we have the release of CPI for August. This could be market moving if we see any surprise to the forecasted 1.8% headline reading and 2.3% core reading.
ECB In Focus
EURUSD is holding up today ahead of the highly anticipated ECB rate decision. The market is broadly expecting the bank to announce a package of easing measures including a cut to the deposit rate, alongside the restarting of QE and repricing of TLTRO’s. Given the built-up level of expectation in the market, any failure to deliver today will likely fuel a sharp move higher in EURUSD. Price is currently hovering under the 1.1025 level for now.
GBP Reacts To Johnson Ruling
GBPUSD has had a subdued session so far though remains supported, just under the 1.2382 level resistance which was tested this week. News that the Scottish court has ruled Johnson’s proroguing of parliament illegal means that the UK Supreme Court will now have to make a ruling next week, creating plenty of two-way risk in GBPUSD.
Equities Softer But Remain Buoyant
Risk assets have softened a little today on the back of a steady rally over the week in response to better relations between the US and China. Trump said that he will postpone the next planned set of tariffs by two weeks, as China is reportedly weighing up US farm imports. Such news is creating optimism around upcoming US/China trade talks. This optimism is seeing SPX500 heading back up towards the 3005.98 level all-time highs.
Safe Havens Fall Amidst Better Risk Appetite
Safe havens have had a fairly subdued day today given the general backdrop of better risk sentiment which has seen both JPY and gold lower against USD. XAUUSD trades 1502.58 last as the recovery off the 1484.53 lows stalls for now. USDJPY trades 107.88 last following the pullback from yesterday’s 107.02 highs.
Crude Collapses Despite Bullish EIA Report
Oil prices remain heavily under pressure today despite the EIA this week reporting a further 6.9 million barrel drawdown in US crude stores. The news was blunted by the EIA also upgrading its US crude production forecasts for 2019 and 2020 along with OPEC downgrading its global oil demand forecasts over the same period. OPEC is currently taking part in its first meeting since June amidst growing speculation that the group will announce further measures to boost oil prices. Crude trades 55.17 last as the rejection from the 58.38 level deepens.
CAD Down, AUD Up
USDCAD has been higher again today in light of the weakness in crude price which has weighed on CAD. USDCAD is now once again heading back up towards the 1.3207 level which was recently tested on the recovery off the 1.3245 lows. A strong CPI print today could pave the way for a burst higher.
AUDUSD remains in the green today as optimism around the better communications between the US and China continues to support the recovery off the recent .67 base. Price is now challenging the .6884 lows which are a major medium-term pivot for the pair.