LONDON (SHARECAST) - This is a review of the elements likely to affect foreign exchange (forex) trading in the European session:
Main headlinesECB Waits On Spain Brinkmanship - Bloomberg
BOE Officials Sow Seeds for Stimulus Split as QE Round Nears End - Bloomberg
Romney dominates presidential debate - FT
International trade: A fragile armistice - FT
The Glory Days of Currency Trading Are Over: HSBC - CNBC
Americas wrap-upRomney goes on offensive against Obama in debate - Reuters
Romney: Obama Favours ‘Trickle-Down Government’ - Bloomberg
Kudlow: A Huge Victory for a Principled Mitt Romney - CNBC
Services in US Expanded More Than Forecast in August - Bloomberg
ADP Says US Companies Added 162,000 Workers to Payrolls - Bloomberg
Confidence of small businesses ebbs on "fiscal cliff": survey - Reuters
World Bank lowers Latin American growth forecast to 3 percent - Reuters
Colombian President's Surgery Is a Success - WSJ
Asia-Pacific summaryAsian Stocks Rise as US Economic Data Beats Estimates - Bloomberg
India Pushes Economy Opening With FDI in Insurance, Pension - Bloomberg
Japan Political Shifts Expose BOJ to Demands for Action - Bloomberg
Japan finmin to meet Geithner on Oct 11 - Reuters
Sunny Soars 1,000% on Korea Presidential Speculation - Bloomberg
Singapore’s Private Home Prices Climb to Record - Bloomberg
Malaysia IPOs Set for Record Year With Astro's $1.5B Sale - Bloomberg
Mongolia Keeping Rio Tinto Deal Puts Focus on Tavan Tolgoi Coal - Bloomberg
Myanmar’s Jade Millionaires Fuel Property Surge - Bloomberg
European newsEU Weighs More Integration of Eurozone Budgets - WSJ
Euro-Region August Retail Sales Unexpectedly Increase on Germany - Bloomberg
Portugal announces ‘enormous’ tax rises - FT
Greece Leader Wins Favour - WSJ
Poland Signals November Cut After Holding Borrowing Costs - Bloomberg
Switzerland leads charge in forex fight - FT
Europe Weighs More Sanctions as Iran’s Currency Plummets - Bloomberg
Turkish Army Responds to Syrian Shelling That Killed Five - Bloomberg
Russia faces end of petrodollar surplus - FT
FOREX actionEUR: The main euro cross-rates show signs of resilience. After yesterday’s fairly weak service sector PMIs the attention turns to the ECB monthly meeting. Mario Draghi could give us a flavour of their economic vision in today’s press conference in Slovenia. There is also an important debt auction in Spain. EUR-USD is trading close to the top end of its recent wide range between 1.2975 and 1.2800. EUR-JPY seems to be heading towards 102.
GBP: The sterling crosses hedge up following the steps of the euro trades. After lacklustre economic figures in the UK all the attention turns to the BOE. The monthly MPC discussion will be focused on the need of further stimuli. We should bear in mind that the latest SMP round is coming to an end. Cable regains the 1.6100 level while GBP-JPY is still trading above 126.00 and climbing towards 127 as said yesterday. In our view EUR-GBP adds value above 0.8000.
CHF: The Swiss franc loses ground versus the euro. EUR-CHF rallies close to 1.2130 and USD-CHF is trading sideways below 0.9400. Recent news point to the SNB doing what the ECB is expected to do in a near future buing Eurozone bonds in large quantities to defend the 1.2000 floor.
Nordics: The Swedish krona and the Norwegian kroner are still in the red. Both the NOK and the SEK lose ground versus the euro and especially against the dollar.
USD & JPY: The US dollar and the Japanese yen show a more neutral stance. The greenback was helped yesterday by a strong ISM service number and better than expected ADP employment figures. The first Obama vs Romney debate was focused on economic issues. Among today data we have the weekly jobless claims, August factory orders and the latest FOMC minutes. USD-JPY trades above 78.50.
CAD, AUD & NZD: After their recent losses the aussie and the kiwi claw back. Book squaring boost the aussie despite bad economic numbers in Australia. The recent RBA interest-rate cut of 25 basic points to 3.25% is still weighing on the Aussie dollar.
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