Talking Points:
Yen Gains on Haven Flows as Chinese Shares Slump on Lending Restrictions
Swiss Franc Continues to Correct Lower After Last Week’s SNB-Driven Jump
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The Japanese Yen outperformed in overnight trade, rising as much as 0.8 percent on average against its leading counterparts. A sharp selloff on Chinese stock exchanges appeared to fuel demand for the safety-linked currency. The Shanghai Composite equity benchmark index fell in excess of 6 percent – yielding the largest decline in five years – after regulators moved to restrict margin lending.
The China Securities Regulatory Commission said it has suspected borrowing of money and stocks by the clients of the country’s leading brokerages including Citic Securities, Haitong Securities and Guotai Junan Securities Co. The move appeared to fuel fears of an exodus of capital from Chinese shares.
The Swiss Franc traded lower as prices continued to digest last week’s breakneck volatility. The currency declined as much 0.8 percent against the majors having soared to multi-year highs against the spectrum of G10 alternatives last week after the Swiss National Bank unexpectedly scrapped its three-year-old Swiss Franc cap of 1.20 against the Euro, saying the “exceptional and temporary measure…is no longer justified.”
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
23:30
AUD
TD Securities Inflation (MoM) (DEC)
0.0%
–
0.1%
23:30
AUD
TD Securities Inflation (YoY) (DEC)
1.5%
–
2.2%
0:01
GBP
Rightmove House Prices (MoM) (JAN)
1.4%
–
-2.2%
0:01
GBP
Rightmove House Prices (YoY) (JAN)
8.2%
–
7.0%
0:30
AUD
New Motor Vehicle Sales (MoM) (DEC)
3.0%
–
-0.5%
0:30
AUD
New Motor Vehicle Sales (YoY) (DEC)
-1.0%
–
-3.7%
4:30
JPY
Capacity Utilization (MoM) (NOV)
–
0.7%
4:30
JPY
Industrial Production (MoM) (NOV F)
–
-0.6%
4:30
JPY
Industrial Production (YoY) (NOV F)
–
-3.8%
5:00
JPY
Consumer Confidence Index (DEC)
38.8
37.7
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
8:15
CHF
Producer & Import Prices (YoY) (DEC)
-0.8%
-1.6%
Low
8:15
CHF
Producer & Import Prices (MoM) (DEC)
-2.4%
-0.7%
Low
9:00
EUR
Eurozone Current Account sa (NOV)
–
€20.5B
Low
9:00
EUR
Eurozone Current Account nsa (NOV)
–
€30.6B
Low
10:00
EUR
Eurozone Construction Output (MoM) (NOV)
–
1.3%
Low
10:00
EUR
Eurozone Construction Output (YoY) (NOV)
1.4%
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.1181
1.1370
1.1469
1.1559
1.1658
1.1748
1.1937
GBPUSD
1.4833
1.4993
1.5072
1.5153
1.5232
1.5313
1.5473
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx