It has been a volatile day, with the first half of the session being dominated by US$ strength, putting pressure on the other majors as well as the metals and oil. That swiftly turned around after comments from Donald Trump, who criticised the Fed’s interest-rate increases, breaking with tradition of avoiding comments on monetary policy by saying he is “not thrilled by higher interest rates”. The White house later had to clarify what he said and to underline that Trump did not mean to interfere with policy. The market has since stabilised somewhat by not before some volatile moves. In short, the Yen and Chf saw a return of some safe haven demand, stocks headed lower, led by the financial sector and the metals saw a late rally, care of the softer dollar after Trump’s comments, while WTI finished on a firmer note after Saudi Arabia promised not to flood the markets with increased supply. In other currencies, the commodity bloc remain heavy, with concerns over global tariffs and with traders watching the direction of the Chinese Yuan (CNY), the Euro headed towards critical support below 1.1600 ahead of the knee-jerk bounce, while Sterling headed below 1.300 on the ongoing Brexit woes, ahead of its own bounce, care of Mr Trump.
In terms of data, the US weekly initial jobless claims dropped -8k to 207k, beating expectation of 221k, the lowest level since December 1969. The Philly Fed business outlook rose sharply to 25.7 in October, well above expectation of 20.6.
Friday looks to be a fairly uninspired session in terms of data although there is an OPEC Meeting which may keep oil traders on their toes. Keep and eye on the China fix, which will determine the direction of the Aud$, in particular
Elsewhere, the day starts with the NZ Visitor Arrivals and Credit Card Spending for June, with the Japan CPI to follow shortly afterwards (exp 0.8%yy, 0.4% for Ex Food/Energy). The German PPI and the EU Current Account will be the main European focus, along with the UK PSNBR for June (exp Gbp 0.277 bio) and the NIESR GDP Estimate (exp 0.3%). That is about it, with nothing to come from the US apart from the odd possible Tweet! Have a good weekend.
|INDICES / COMMODITIES|