Concerns over China’s softening growth outlook are the focus for FX ahead of the NA session, weighing on commodity cur-rencies like NZD, AUD and CAD. JPY is also weak, falling to new multi-year lows, while EUR consolidates as market participants consider the upside surprise to France’s CPI release. For GBP, its strength and outper-formance is notable, as it begins to close the weekend gap following the formation of a bullish reversal candle pattern (middle chart) amid shift-ing referendum poll data. For the commodity currencies, the release of China’s inflation data highlighted a softened trend, with both CPI and PPI falling to a greater extent than had been expected. Oil (both WTI and Brent) and copper are under pressure, while the broader market tone is one of moderating risk appetite with equity futures pointing to a nega-tive open as the U.S. 10Y yield softens back toward 2.50%. Gold is also weak and has fallen to its lowest level since late January. Thursday’s NA session will be relatively quiet in terms of releases, with only jobless claims and the monthly budget statement leaving market participants focused on broader developments including the escalation of EU sanc-tions on Russia.
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