Geo-political tensions increase

6 January, 2016

It is the yen that has really run away to the upside so far this week (and year), but at the other end of the scale, it’s mostly the commodity currencies that have struggled on the majors. The CAD is of particular note as USDCAD threatens a sustained push above the 1.40 level. A further easing from the Bank of Canada cannot be ruled out and it is divergence in underlying interest rate policy that is a very powerful fundamental driver of currency trends. For this reason, the Canadian jobs data this Friday could eclipse the US release for its significance to currency markets. Overnight, we’ve seen a further rise in the USDCNY reference rate and modest recovery in the stock market in China, this despite the latest Caixin PMI services data falling short of expectations at 50.2 (from 51.2). Geo-political tensions remain high with the news that North Korea tested its first Hydrogen bomb overnight. Naturally the Korean won added to yesterday’s weakness, pushing up just shy of the 1200 level.

For today, markets will be attempting to squeeze some juice out of the latest FOMC minutes from the December meeting. Given that they raised rates, the main focus will be any fresh indications of what will decide further policy moves. The accompanying statement was fairly detailed on this front and given the accompanying press conference, the risk is low that the minutes throw a curve-ball that will impact markets, but investors will be on their guard nonetheless. Before the FOMC minutes, we have final PMI data in the Eurozone at 09:00 GMT, with UK services data at 09:30 GMT. There is also services PMI data in the US and durable goods data.


Source link  
Markets recover after the drop

The markets decline on investors' fears that trade conflicts will drag on and slow down demand, and this dynamic coincided with breaking through important...

Markets pressured by Huawei problem

Alphabet and some other American IT companies have suspended business with Huawei, which is one of the first examples of major consequences for...

The climate is changing rapidly

British people need to fly less, drive electric cars, eat little meat and turn their home thermostats down to 19 degrees Celsius (66 Fahrenheit) in order to rein...


Chinese stocks saw their worst week

Chinese stocks have taken investors on a ride this year. Shanghai and Shenzhen have been the best performing global markets this year, with the Shanghai...

Risk-sensitive currencies on the rise

Stock markets show growth after the release of strong data for China and Japan as their respective PMIs were better than expected which supported...

Trump again puts pressure on OPEC

President Donald Trump told OPEC on Thursday that its members should start pumping more oil, marking his second warning to the producer group this year...


Turkish lira fell by 5% before elections

The Turkish lira dropped by as much as 5 percent against the dollar on Thursday morning, as the country gears up for elections this weekend. The greenback...

May won't ask for a long Brexit delay

Prime Minister Theresa May won't ask the European Union for a 'long' delay to the Brexit deadline, her office said, after pro-Brexit ministers objected...

Demand for safe assets grows

Markets remain under moderate pressure, despite the Fed comments. Powell's semi-annual speech in Congress reinforced expectations that the US Central Bank...

  


Share it on:   or