Today was a busy day with many fundamental datas, first we started with Claimant count change & Average earnings index in U.K.
The claimant count change was a large positive deviation, in fact way positive than the range - however, the average earnings dropped 0.2%.
Normally you would think market should react very positively to the result, however, that was not the case as market has been focused on the wage growth in UK because that was what BOE said they were focusing on .
On top of that there seems to be a different method to calculate Claimant Count change this time and that’s why the number was so crazy.
Anyway, GBP has been sold off after the release.
Then in NY session, consecutive of U.S datas from CPI & Retail both headline and core were all out and every datas were positive than previous and expected.
USD went up immediately but later the other datas especially Industrial Production has been a disappointed figure.
Fed Yellen also testified again with not too much new insight, she still remained quiet hawkish while more Fed members have released hawkish comments as well.
The Crude oil inventory was once again a large built up,and oil market had been pressured down but we finished the NY session with another positive equity markets with consecutive high for S&P and Dow Jones due to the Tax Reform sentiment.
We also saw employment change & unemployment rate from AUD in Asian session and which datas were positive. However, looking into the details we saw the Full-Time employment has decreased significantly from last time and AUD went down because of that.
Today we also had Trump meeting with Israel PM and had a joint conference.
For EUR
Eur continues to be a negative currency without too much catalyst to drive it anywhere. The fundamental side still remains weak due to low rate environment by ECB while Greek debt negotiation continues to be a fundamental issue and negative sentiment for EUR. Meanwhile, the political unstableness continues to shadow France and the whole Eurozone. The recent soft GDP data from Eurozone also played down the positive economic expectation of Euro that we have had since the beginning of this year.
For USD
The inflation & retail datas today both headline and core had once again been great fundamental support for USD. Although the productions & manufacturings in U.S are still low, but that was always an issue.
With the full labour market and higher inflation while consumption remains strong, Fed has very little reasons to NOT hike rate now, especially FED has always been “data driven” as they claimed.
The interest rate hike probability has increased significantly these few days in the futures market since Yellen has given out the speeches with more fundamental datas also supported the picture.
Meanwhile, Trump has stopped the attacking to other allies and the recent behaviours of him have proven to be much stable.
The Tax Reform & removal of Dodd-Frank regulations also injected more positive sentiments into USD.
USD actually had a bit of sell off against the above fundamental & sentimental reasons and the only explanation is the profit taking and technical resistance.
This can actually be a good opportunity to buy more USD based on the fundamental & sentimental strength now.
For GBP
The disappointment of wage growth today had sank GBP a bit, without the wage to push up the consumption, or you can say with the inflation to push down the wage from employers, either way it is not a good picture for UK and not what BOE is looking for to hike.
On the contrary, if we have lower consumption because of higher costs from producers to the products - the economics might really goes into recession as what many had predicted after Brexit.
After all, the economists might be right but wrong at the timing.
Of course, everything will have to depend on how the Brexit goes and whether UK can strike a good deal to maintain its importance in the globe.
For AUD
The commodity currencies were actually the winners today, even against a strong dollar. AUD had gone up from yesterday’s drop and was virtually unaffected in front of positive USD datas and sentiment from Yellen.
There weren’t any fundamental catalyst and the only reason was the risk on appetite.
While the higher interest rate by Fed will trigger the global risk on sentiment and be benefited for USD, AUD might actually be a even better buy as AUD has a much stable political environment now.
The risk for AUD still remains to its economic strength as we still don’t have any good fundamental datas to support the surge of AUD recently.
Today the employment datas continued to be soft and if the GDP data at the end of this month still cannot pick up - then the speculation for RBA to cut interest rate further is very possible.
For NZD
Without any catalysts or fundamental datas, NZD also went up today and actually was the strongest currency during London & NY session.
As mentioned, with a much better fundamental picture and stronger economic datas, NZD has been sold off last week by the effort of its own central bank - and once that sentiment faded, NZD will revert back to its fundamental strength which is what we’re seeing now.
For JPY
the current risk on sentiment has pressured Yen down, but of course, people will always buy Yen back for profit taking.
Yen is still a fundamental bearish currency and watch out when trading it against EUR as we will have more sentimental events out of Eurozone which might trigger a large safe heaven inflow.
For CHF
the Swiss is in the same spot as Yen in regards to safe heaven inflow, JPY will always be a much better choice especially what triggers the risk off sentiment nowadays had been the Eurozone political unstableness.
If Eurozone is unstableness, then CHF will also not be so good to buy as Swiss relies heavily on trading with EU.
Today was a busy day with many fundamental datas, first we started with Claimant count change & Average earnings index in U.K.
The claimant count change was a large positive deviation, in fact way positive than the range - however, the average earnings dropped 0.2%.
Normally you would think market should react very positively to the result, however, that was not the case as market has been focused on the wage growth in UK because that was what BOE said they were focusing on .
On top of that there seems to be a different method to calculate Claimant Count change this time and that’s why the number was so crazy.
Anyway, GBP has been sold off after the release.
Then in NY session, consecutive of U.S datas from CPI & Retail both headline and core were all out and every datas were positive than previous and expected.
USD went up immediately but later the other datas especially Industrial Production has been a disappointed figure.
Fed Yellen also testified again with not too much new insight, she still remained quiet hawkish while more Fed members have released hawkish comments as well.
The Crude oil inventory was once again a large built up,and oil market had been pressured down but we finished the NY session with another positive equity markets with consecutive high for S&P and Dow Jones due to the Tax Reform sentiment.
We also saw employment change & unemployment rate from AUD in Asian session and which datas were positive. However, looking into the details we saw the Full-Time employment has decreased significantly from last time and AUD went down because of that.
Today we also had Trump meeting with Israel PM and had a joint conference.
For EUR
Eur continues to be a negative currency without too much catalyst to drive it anywhere. The fundamental side still remains weak due to low rate environment by ECB while Greek debt negotiation continues to be a fundamental issue and negative sentiment for EUR. Meanwhile, the political unstableness continues to shadow France and the whole Eurozone. The recent soft GDP data from Eurozone also played down the positive economic expectation of Euro that we have had since the beginning of this year.
For USD
The inflation & retail datas today both headline and core had once again been great fundamental support for USD. Although the productions & manufacturings in U.S are still low, but that was always an issue.
With the full labour market and higher inflation while consumption remains strong, Fed has very little reasons to NOT hike rate now, especially FED has always been “data driven” as they claimed.
The interest rate hike probability has increased significantly these few days in the futures market since Yellen has given out the speeches with more fundamental datas also supported the picture.
Meanwhile, Trump has stopped the attacking to other allies and the recent behaviours of him have proven to be much stable.
The Tax Reform & removal of Dodd-Frank regulations also injected more positive sentiments into USD.
USD actually had a bit of sell off against the above fundamental & sentimental reasons and the only explanation is the profit taking and technical resistance.
This can actually be a good opportunity to buy more USD based on the fundamental & sentimental strength now.
For GBP
The disappointment of wage growth today had sank GBP a bit, without the wage to push up the consumption, or you can say with the inflation to push down the wage from employers, either way it is not a good picture for UK and not what BOE is looking for to hike.
On the contrary, if we have lower consumption because of higher costs from producers to the products - the economics might really goes into recession as what many had predicted after Brexit.
After all, the economists might be right but wrong at the timing.
Of course, everything will have to depend on how the Brexit goes and whether UK can strike a good deal to maintain its importance in the globe.
For AUD
The commodity currencies were actually the winners today, even against a strong dollar. AUD had gone up from yesterday’s drop and was virtually unaffected in front of positive USD datas and sentiment from Yellen.
There weren’t any fundamental catalyst and the only reason was the risk on appetite.
While the higher interest rate by Fed will trigger the global risk on sentiment and be benefited for USD, AUD might actually be a even better buy as AUD has a much stable political environment now.
The risk for AUD still remains to its economic strength as we still don’t have any good fundamental datas to support the surge of AUD recently.
Today the employment datas continued to be soft and if the GDP data at the end of this month still cannot pick up - then the speculation for RBA to cut interest rate further is very possible.
For NZD
Without any catalysts or fundamental datas, NZD also went up today and actually was the strongest currency during London & NY session.
As mentioned, with a much better fundamental picture and stronger economic datas, NZD has been sold off last week by the effort of its own central bank - and once that sentiment faded, NZD will revert back to its fundamental strength which is what we’re seeing now.
For JPY
the current risk on sentiment has pressured Yen down, but of course, people will always buy Yen back for profit taking.
Yen is still a fundamental bearish currency and watch out when trading it against EUR as we will have more sentimental events out of Eurozone which might trigger a large safe heaven inflow.
For CHF
the Swiss is in the same spot as Yen in regards to safe heaven inflow, JPY will always be a much better choice especially what triggers the risk off sentiment nowadays had been the Eurozone political unstableness.
If Eurozone is unstableness, then CHF will also not be so good to buy as Swiss relies heavily on trading with EU.