• Risk-on mode broadens as AUD and NZD are among the best performers in G10
  • SEK remains in the limelight following the excellent inflation report
  • Busy afternoon for USD traders as Yellen to testify once again

European equity markets are thriving while risk-on mode is getting more visible across the FX market. On the other hand, oil prices remain in a retreat following updated outlook provided by the IEA. The International Energy Agency said it was less confident on oil rebalancing as OPEC’s output rose. As a result, oil prices are losing a few tenths percent being a little drag on the Canadian dollar.

Let’s move the the Asian session where moods were great as the Chinese Hang Seng CE (CHNComp on xStation) surged by nearly 1.6% and other Asian indices rallied as well. Decent trade data from the Chinese economy assured investors and helped AUD climb the most among the G10 group. On that account, both AUD and NZD are the most attractive currencies in the eyes of investors gaining 0.75% and 1% respectively against the US dollar. It’s worth mentioning the AUD gains despite a 2% decline in iron ore.

Following the upbeat Asian session the European indices have started the day quite indecisively. There were final inflation readings from Europe’s economies which turned out to be in line with preliminary figures as it was widely expected. The largest mover within the DE30 has been Daimler. A decline has been sparked by the report that an investigation (by German prosecutors) into the company’s diesel-engine emissions controls may involve more than 1 million vehicles.

In terms of currencies the SEK keeps prospering really well as inflation releases proved to beat expectations across the board. Data for June showed that CPI came in at 1.7% yoy while a market consensus had pointed to a 1.6% yoy. Whereas, even a larger surprise was seen in terms of core CPI which amounted to 1.9% yoy. The SEK has strengthened immediately pushing the EURSEK to the lowest level since March, the bond market calls into question so severe appreciation of the krone though.

Looking to today’s calendar there are a few events of note with the Yellen’s appearance before the Senate Banking Committee being the most relevant one. All releases are scheduled for the US economy, hence the USD could respond to them.

Have a look at the technical signal on silver we’ve launched earlier.