As you were

20 January, 2016

Yesterday rise in stocks and oil, in part on the back of expectations of further Chinese stimulus, always looked a little strange and so it is that we’ve seen a more negative tone emerge to stocks and energy overnight. In FX, this means that the fall in the yen brought has been quickly reversed, USDJPY very close to the 116.50 low seen at the end of last week. USDCAD moved higher once again, not having seen a down day on a closing basis for the whole of the year to date. Meanwhile, sterling has nearly reached the most bearish of bank end Q1 forecast already (1.41), vs. the median expectation of 1.51. BoE Governor Mark Carney continues his penchant for trying to guide markets on rates (and rather unsuccessfully), confirming what markets had already taken on board, namely that “this is not the time to raise interest rates”. As such, this was not a great surprise to the currency. The current environment has continued to favour the Swiss franc as well as the yen, with the euro holding up well and the US interest rate story has changed from pricing hikes, more towards pricing steady policy, at least for the first half of the year.

The focus early on today will remain with sterling as UK labour market data is released at 08:30 GMT. Thereafter, we’re going to be looking at the CPI data in the US, where the headline rate is seen rising further from 0.5% to 0.8%, whilst the core rate is seen rising marginally from 2.0% to 2.1%. Weaker figures could weight on the dollar, but it would take numbers more than 0.1% off expectations to really impact, given the shift in rate expectations seen so far this year. It’s risk, China and the impact on equities that will continue to drive FX sentiment over the coming days.


Source link  
Markets look to Central Bankers

Asian Equities traded higher on Tuesday approaching near two-year highs on Tuesday as USD strength helped exporters...

Global Economic Optimism Continues

Global equities moved higher on Monday as optimism continued to improve on global economic growth. However, USD...

BOJ Monetary Policy Remains Steady

The Bank of Japan maintained their monetary policy on Friday whilst upgrading their assessment of private consumption...


Final Confirmation for a June Rate Hike

The crucial US labour market data for May will be released today, June 2nd at 13:30 BST. It includes non-farm payrolls...

GBP Under Pressure

The Brexit negotiation process is one of the focuses of the upcoming UK election. Although the Conservative Party has pledged a smooth and orderly...

Oil Slumped Post OPEC Extension

On Thursday, OPEC announced that the existing output cut agreement will be extended for an additional 9 months...


USD Bounces From Month Low

Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion...

Dollar index hit a new low

The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211...

USD Hit Post Election Low

To date the dollar index has almost given up all of the post presidential election rally...

  


Share: