Corrective activity abounds

15 February, 2016

With US markets closed for President’s day today, it’s likely to prove a slower start to the week, but as we know, it’s not just about the US anymore, with much of the recent volatility being triggered by events beyond US shores. Overnight, we’ve seen weaker than expected data in Japan showing the economy contracted some 0.4% in the final quarter of last year. Japan has contracted in half of the previous 16 quarters, with only one period of contraction more than two quarters. In other words, it remains an economy struggling for sustained momentum. Data from China has also been mixed with exports falling markedly, although an even larger fall in imports allowed for a better than expected reading on the trade balance data. The volatility in markets continues unabated, with the Nikkei more than reversing Friday’s weakness, up more than 7% towards the close. USDJPY has reversed upwards as well, but in a relative sense the yen still remains on the firm side for the month so far.

Elsewhere in the world of FX, the modestly corrective tone continues, with the Aussie higher from the Thursday lows and the euro also correcting from the firmer tone seen of late. Equities also starting on a firmer footing, with financials leading the gains once again. Gold is more than 2% weaker in Asia trade, but after the sharp gains seen last week, that’s merely a rounding area in light of recent moves. The yuan has appreciated substantially, with comments from PBOC Governor also helping over the weekend to curb speculators on the currency. Note that ECB President Draghi speaks in front of the European Parliament later today (scheduled for 14:00 GMT) and in light of the lack of US data, this could drive sentiment in the latter half of the European session.


Source link  
All Eyes on Central Banks

Markets were, for the most part, little changed on Wednesday as traders waited for today’s Bank of Japan and ECB rate decisions. Earlier today...

Dollar Bears

UK Consumer Price Index (CPI) data was released on Tuesday showing inflation easing for the first time in nearly 10 months, retreating from the near 4-year high touched in May...

More Record Highs for Equities?

Early indications from Asia this morning are pointing towards a strong day for global equities, continuing the momentum from last week...


US Data brings on USD bulls

U.S. job growth surged more than expected in June and employers increased hours for workers, with signs of a labor market strengthening that is likely...

Biggest Quarterly Drop in 7 Years

USD recovered marginally on Friday, but had its biggest quarterly decline against several currencies in nearly 7 years following hawkish signals...

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...

  


Share: