Back
27 Jan 2014
European open: Broad risk-off sentiment dominates overnight session
FXstreet.com (London) - Markets carried over Friday’s risk-off trading into this week following the threat of China trust defaults as well as a broad Chinese deceleration in growth, the prospect of the next round of US Federal Reserve quantitative easing tapering and the Bank of Japan holding off on further easing.
In addition, the EM rout continues with the Mexican Peso, Argentine Peso and Turkish Lira all under pressure.
Japan ended two days of gains against the dollar on a wider than expected trade deficit, falling from a seven-week high against the dollar.
Japan’s trade deficit widened to a recorded JPY11.47 trillion in 2013, according to statistics released this morning by the Ministry of Finance. The deficit jumped on yen weakness inflating import prices, almost doubling last year’s deficit of JPY6.94 trillion.
In Europe today, consensus expectations are for a strong reading from German IFO numbers. Expectations are for a rise to 110 from 109.5 in the business climate reading and a rise to 108 from 107.4 in business expectations, however there is scope for further upside, based on the positive momentum from German PMIs.
Also today is the start of two days of Eurogroup meetings, with a focus on the framework of the European stability mechanism as well as the issues facing Greece, Portugal and Spain.
In the US today we will see the release of December new home sales and the Dallas Fed manufacturing index. New home sales are expected to fall slightly to 0.457m from the November 0.464m reading.
In addition, the EM rout continues with the Mexican Peso, Argentine Peso and Turkish Lira all under pressure.
Japan ended two days of gains against the dollar on a wider than expected trade deficit, falling from a seven-week high against the dollar.
Japan’s trade deficit widened to a recorded JPY11.47 trillion in 2013, according to statistics released this morning by the Ministry of Finance. The deficit jumped on yen weakness inflating import prices, almost doubling last year’s deficit of JPY6.94 trillion.
In Europe today, consensus expectations are for a strong reading from German IFO numbers. Expectations are for a rise to 110 from 109.5 in the business climate reading and a rise to 108 from 107.4 in business expectations, however there is scope for further upside, based on the positive momentum from German PMIs.
Also today is the start of two days of Eurogroup meetings, with a focus on the framework of the European stability mechanism as well as the issues facing Greece, Portugal and Spain.
In the US today we will see the release of December new home sales and the Dallas Fed manufacturing index. New home sales are expected to fall slightly to 0.457m from the November 0.464m reading.