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The greenback continued its post-CPI slump on a positive risk day ahead of Michigan Consumer Sentiment. Optimism about the global economy has been raised as China finally eased covid-19 quarantine measures along with flight bans. Growth in the UK is still on the negative side as witnessed by mixed Q3 GDP data. European stocks got boosted by luxury goods retailers as China reopens although the gains fizzled out post-downbeat UK GDP. ECB members and the SNB chairman will be speaking.
The EURUSD continued its bullish momentum riding on yesterday’s rally after less-than-expected US inflation data. The US Core CPI MoM came in at 0.3% against the 0.5% anticipated while year-over-year CPI was at 7.7% down from 8.2%. This together with more-than-expected Initial Jobless Claims fuelled hopes of an end to aggressive tightening by the Fed pinning down the greenback. The euro got support from positive risk flows on the day as CPI data from Germany came unchanged. The pair rose +0.45% breaching the 1.0200 high last seen in August. Further up the 1.0350 level is in focus with a possible 1.01000 retest.
GBPAUD dipped by -0.45% after reports from China raised optimism about global economic growth. China has finally confirmed easing covid-19 curbs after denying the speculations last week. The move uplifts the Australian Dollar, a big trade partner with China. In the UK preliminary GDP showed little contraction in the economy coming in at -0.6% vs -0.1% previously every month while the yearly figures came in at 2.4% vs 2.1% anticipated. The BoE however, warned that they are already in a recession which may last 2 years at their previous meeting. Bulls got rejected at the 1.7738 level and targets may be seen at 1.7500 and 1.7480 on an extended slide.
CADCHF was down -0.48% in the European session despite higher crude oil prices. The oil-linked CAD failed to capitalize on upbeat oil prices and fell from the 0.7250 intraday high. The SNB Chairman Thomas Jordan said in a speech that monetary policy decisions are data dependent with the SNB-BoC policy difference sitting at 3.25%. Later on, the SNB chairman Thomas Jordan will be speaking. Bearish targets may be seen at 0.7180 and 0.7100.
European stocks trimmed earlier gains following disappointing GDP data from the UK. The FTSE100 was down -0.56% after sweeping above the 7400 high. A fall below 7300 and 7250 may mean a short-term bearish outlook. The CAC40 was flat at -0.03% from the 6636 resistance and the pair might retest 6450. The GER40 in Germany was trading at +0.13% moving between 14300 and 14150.
US stock futures edged higher on dollar weakness to end the week. The US30 futures were up +0.14% from the 33700 level while capped by 34000 to the upside. US 500 futures gained +0.10% trading between 3950 and 4000. US100 futures were up +0.21% from the 11600-support establishing a new high above the October high.
Elsewhere in commodity markets, oil prices impressively surged more than 3.00% in response to lower inflation figures from the US. In China, covid-19 restrictions have been eased raising hopes for more crude oil demand. Brent was up +3.51% leaving an intraday low at $93.20. Bulls may face resistance at $96.50 and $98.00. The US WTI rose by +3.79% from the 86.20 low with a psychological resistance at $90.00.
