Corona-who? Lockdown prospects in New Zealand and rising trade and geopolitical tensions between the U.S. and China got nothing on optimism over vaccine prospects today.
Think the risk-taking will extend to London session trading?
Before we check out today’s setup, here’s a list of all the market-moving themes during the Asian session:
Fresh Market Headlines & Economic Data:
- SNB Gov. Jordan: expansive policy ‘more necessary than ever’
- Moderna set to start final-stage vaccine trial in 30,000 people
- Fed’s Harker says U.S. economic downturn is painful and ‘stubbornly long-lasting’
- Fed’s Kaplan says there is ‘lots of overcapacity’ in U.S. economy
- Trump signed law slapping sanctions on China for interference in Hong Kong
- China to impose retaliatory sanctions over U.S. law on Hong Kong
- Australia’s consumer sentiment drops again as COVID second wave
- Japan manufacturers’ mood pinned near 11-year lows as pandemic hammers global demand
- BOJ keeps policy steady, sticks to cautious recovery view
- BOJ: Japan GDP to shrink 4.7% in fiscal 2020
- Oil demand will rebound sharply in 2021, surpassing pre-virus levels, OPEC says
- NZ could go into regional lockdown if Covid-19 re-emerges in community
- Trump “not interested” in Phase 2 trade talks with China
- Asian markets, risk assets ride up on vaccine hopes
Upcoming Potential Catalysts on the Economic Calendar:
- BOJ’s presser on tap
- U.K.’s CPI numbers at 6:00 am GMT
- BOE MPC member Silvana Tenreyro to give a speech at 8:00 am GMT
- Canada’s manufacturing sales at 12:30 pm GMT
- NY manufacturing sales at 12:30 pm GMT
- BOC’s policy decision at 2:00 pm GMT
What to Watch: GBP/CHF
GBP/CHF is consolidating around the 1.1825 area that lines up with a mid-channel and 200 SMA resistance as well as a key area of interest on the 1-hour time frame.Remember that the CPI report is due today and, while it’s not as market-moving as the monthly GDP numbers, it can still support or stall intraday trends.
The pound stalling its Asian session rally is good news for market bears who are looking for another round of disappointing headlines from the U.K.
Based on the pair’s average daily volatility, GBP/CHF could fall to the 1.1750 if we do see downside misses from the U.K.
If the risk-friendly trade environment extends to London session trading, however, then GBP/CHF could break above its current consolidation to reach areas of interest closer to the 1.1870 or 1.1900 levels.