Chinese data supports the AUD
What happened overnight
– China December trade data better than expected
– French IP data better than expected
– Sweden IP data weaker than expected
Commodity bloc currencies have gained ground on firmer Chinese data, while the JPY has continued to reweaken. AUDUSD has traded up to 1.0580 highs, gaining sharply as Chinese trade data were published and extending gains through the European morning. The pair is hovering just below the threemonth highs of 1.0586 set in December. Meanwhile, the JPY remains under pressure, with USJPY trading up to 88.31, so far holding below Friday’s major highs at 88.41. EURUSD shorts continue to get squeezed, with EURUSD back above 1.31 this morning. In equity markets, the Nikkei continues to lead the way with an 0.7% gain overnight, while other markets are also mostly in positive territory, with the S&P future up 0.3%. European sovereign markets are rallying again, with Spanish 10-year yields down 16bp and below 5% after good demand at a Spanish bond auction.
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Credit Suisse