Other economic highlights for today (6/12/2018)

In the European session, we get UK’s employment data for April and Germany’s ZEW economic sentiment and current conditions indicators for June.

In the American session we get the US inflation data for May and the API weekly crude oil inventories figure.

Also please be advised that the monthly OPEC report is due out today and could provide volatility in oil prices.

Brexit test for Theresa May

On other headlines, UK government’s key Brexit legislation returns to parliament for a vote. UK PM Theresa may will have to pacify both pro Brexiteers as well as pro EU rebels in order to pass the legislation. The two key amendments which the UK government will have to overcome relate to the UK remaining in the EU customs union and the second about parliament given the power to veto a possible deal with the EU. The markets seem to be in a “wait and see” position, watching out for signs of the Brexit prospects as well as the PM’s future and should there be positive headlines, we could see the pound getting some support.

Cable dropped yesterday after the disappointing results of the UK financial releases, aiming of the 1.3330 support line. We could see the pair, dropping further as the financial releases today could weaken the pound and at the other hand strengthen the USD. Should the pair continue to be under selling interest we could see the pair breaking the 1.3330 support line and aim for the 1.3215 support barrier. Should it find fresh buying orders along its path we could see it aiming or even breaching the 1.3425 resistance level.

US Dollar strengthens as 10 year treasury yield surpasses 3%

The greenback strengthened against a number of major currencies, as the US 10 year bond yield broke the 3% level once again. The yield had surpassed once again the 3% hurdle, near the end of April, causing the US Dollar to rally, however yesterday it hit a seven year high reaching 3.095%. Analysts, consider that the rise in the 10 year benchmark Treasury bond yield added to the US Dollar’s relative yield appeal against higher risk and higher yielding rivals. The drop in the prices of gold could be indicative of the prementioned appeal. Should the yield continue to rise we could see the USD strengthening and vice versa.

EUR/USD dropped yesterday breaking the 1.1882 support line approaching the 1.1806 support line and stabilizing somewhat. Should the USD strengthening momentum continue we could see the pair dropping further. Also, Eurozone’s financial data releases could weaken the EUR side. Should the bears take over we could see the pair dropping, breaching the 1.1806 support line and aiming for the 1.1715 support barrier. On the other hand should the bulls be in the driver’s seat we could see the pair breaking the 1.1882 resistance level and hover above it.