European stock markets moved higher, led by the DAX, which shrugged off further confirmation that a German coalition is not a done deal yet, but benefited from the resulting dip in the EUR against the dollar. The DAX was higher mid-session matching the 1% rise in the Nikkei that was underpinned by positive economic data. Company reports also helped to underpin markets and the German Dax was dominated by a sharp rise in Hugo Boss shares, while SAP was the main winner in the DAX as the weaker EUR helped the stock to recover from recent losses. U.S. futures are also up and stock markets, as well as bond markets, seem to be in a good mood. Oil prices are lower meanwhile WTI Nymex future is trading at USD 63.84 per barrel.
WTI benchmark futures are down 0.7% at $63.84, earlier logging a two-session low at $63.77. This is the first down day since January 5th and only the fourth down day in the last month. The correction comes amid a broader bounce in the dollar, as speculative long positions in EUR/USD ran for cover amid reports that the German coalition talks are faltering. Speculative positioning in crude futures have been at record highs, so there has been for some time built-up potential for a sharp pullback, despite an ongoing overwhelmingly bullish narrative in the market.
Cryptocurrencies are under pressure amid concerns of bans in Asia
Cryptocurrencies are under pressure amid concerns of bans in Asia. Comments from South Korea’s Finance Minister stressing that banning trade in digital currencies was still a “live option”, but subject to a thorough government review, have put pressure on Bitcoin and Ethereum. Kim Gong-Yeon said “there are no disagreements over regulating speculation”, but added that government ministries need to very seriously review the option of shutting down digital currency exchanges. Cryptocurrencies have been volatile in recent weeks amid fears that governments will step up regulation or impose outright bans.
UK December CPI met at expectations in dipping to 3.0% year over year from the cycle high of 3.1% that was recorded in November. This met the median forecast, while Core CPI ebbed a little more than expected in coming in at 2.5% year over year, down from 2.7% in the month prior and undershooting the median for 2.6% year over year.
UK PPI input prices came in slightly below forecasts at 4.9% year over year, while PPI output prices came in slightly above expectations, at 3.3% year over year. Overall, the data fits with BoE projections. Increases in fuel and tobacco prices were offset by declines in airfares and recreational goods. The impact of past sterling declines has reduced, with EUR/GBP and the broader trade-weighted measure of the pound showing a comparatively narrow decline between December 2017 and December in the previous.
This article was originally posted on FX Empire
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