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  
US Jobless Claims Lowest Since 1973

US Department of Labor released Initial Jobless Claims for the week ending October 13th that showed a resilient and stable labor market...

Politics Influence Markets

With fears abating surrounding the threat of Catalan independence, the EUR moved higher overnight. Catalan President Puigdemont stated...

US Unemployment at Lowest Level

On Friday, the US Department of Labour released Nonfarm Payrolls for September. The meagre forecast of 88K was beaten with an even worse...


Further Strong Data From the US

On Wednesday, the US Institute for Supply Management (ISM) released Non-Manufacturing PMI for September that surprised the market...

Upbeat Data Boosts Dollar

On Monday, the US Institute for Supply Management (ISM) released data showing the index of national factory activity surged to a reading...

Harvey & Irma Effects Still Evident

The EUR suffered a second day of selling pressure, as the markets are growing concerned that the rise in right wing nationalism witnessed...


Risk-On or Risk-Off?

The rhetoric continues between North Korea and the United States with North Korea’s Foreign Minister, Ri Yong Ho, describing President Trump’s recent comments as “tantamount...

German & New Zealand Elections

The results of the German Election have re-elected Chancellor Angela Merkel for a fourth term. Her CDU party won fewer votes than was expected and Chancellor Merkel...

Fed Holds Rates for Now But...

Unsurprisingly, the Federal Reserve kept rates on hold following the end of its 2-day meeting on Wednesday. They did, however, indicate that...

  


Share: