EUR/USDMarket mood stays cautiously optimistic amid deepening Chinese factory deflation that offset positive US-China trade development. Asian equities turned south on poor China PPI. Positive signals concerning the US-China trade deal are likely favouring the global risk sentiment while tension between the US and the Middle East, coupled with the UK-Iran tussle, suggest remaining cautious.
Additionally, US yields crept higher and supported the dollar against the euro, yen and gold, while yields firmed up after the US President Trump said the US-China trade talks will restart next week and that China wants a deal.
EUR/USD’s upside remains capped on the mid-1.10 handle amid a broadly bid US dollar and ahead of the ECB monetary policy meeting this Thursday. GBP/USD trades on the defensive below 1.2350 ahead of the UK labour market report and a likely calm on the Brexit front. USD/JPY eases from over 1-month tops but still comfortable above 107.00 mark.
No top-tier data releases are expected from Europe today, therefore the UK docket will gather most attention in today’s morning session. The UK labour market report is due at 08:30 GMT.
The US economic calendar will repeat Monday’s pattern of no top-tier releases. However, JOLTS Job Openings for July, expected 7.300M versus 7.348M prior, could entertain traders in the meantime.
Oil prices sit at six-week highs on hopes of extended OPEC output cuts ahead of the key OPEC meeting on September 12th while Gold consolidates losses below $1,500.