Forex Afternoon Wrap – September 29, 2015

Equities fall on commodity prices. Risk aversion is back

Today’s Economic Data:

German import prices m/m -1.5% vs. -1.4%

Spain flash CPI y/y -0.9% vs. -0.6%

German flash CPI m/m -0.2% vs. -0.1%; CPI y/y 0.0% vs. 0.1%

UK M4 Money Supply m/m -0.4% vs. 0.7%

UK Mortgage approvals 71k vs. 70k

UK CBI Realized sales 49 vs. 29

Canada RMPI m/m -6.6% vs. -7.3%; IPPI m/m -0.3% vs. -0.8%

S&P Case Shiller composite HPI m/m -0.2% vs. 0.1%; HPI y/y 5.0% vs. 5.1%

Later:

CB Consumer confidence

BoE’s Carney Speech

The currency markets opened today on a strongly risk aversion note as the Yen made early gains in the Asian trading session and continued to remain firm. USDJPY dipped to session lows of 119.335 before posting a modest recovery to gain 0.03% for the day. There was no major data from Japan or from most of Asia. The equity markets remained under pressure with the Nikkei 225 losing over -4.0% for the day. The Aussie and the Kiwi were also under pressure dragged down by weak commodity prices. AUDUSD fell to session lows of 0.6946 before posting a modest recovery, while NZDUSD tested the lows of 0.6298 before gaining 0.49% for the day. End of month rebalancing is likely to see the US Dollar turn weaker giving some respite across the board.

The European trading session was marked with German import prices declining -1.5% for the month, below the median estimates of -1.4%. Spain’s flash CPI estimates came lower than expected at -0.9% against the median estimates of -0.6%. Germany’s flash CPI was flat on an annualized basis while the monthly inflation data was weak by -0.2%. Subdued inflation is likely to keep the ECB’s QE expansion talks alive in the near term ahead of a new trading month which will see further data and likely to shed light on the Eurozone’s inflation and GDP readings. The EURUSD failed to capitalize on its rally early in the day as the single currency declined off the highs of 1.1279 to trade currently at 1.12, losing -0.36% for the day.