Today was generally quiet since yesterday’s large movement of GBP.
As mentioned, GBP went through a typical ride of emotions, from excessive pessimistic to excessive optimistic.
Because of that, the London session employment datas of GBP did not actually provide too much action, both Average Earnings and Claimant Count Change were a beat, however, the price did not react and the reaction was muted.
Then we had the CPI number from USD which all came out as positive but not a deviation to drive the market.
Finally, BOC released its statement and kept the rate unchanged as expected, however, the surprise came in at the press conference when BOC Poloz mentioned that the rate cut possibility is on the table due to the uncertainty of U.S policy.
The market reacted by selling CAD.
It’s not only because of the possibility of rate cut, the context is that U.S has sent official letter to inform Canada of their intention to scarp NAFTA. Before today, all headline of trading war was between U.S and Mexico, so this is really the first time people realized that Canada might effected greatly if the free trade deal is gone. Because of that, the economy will take a shift to the downside, hence, the necessity of cutting interest rate is back on the table as previously, BOC has been stating their neutrality for the interest rate until 2018. That has certainty changed for now.
In the afternoon Yellen spoke at SF and the content was quiet hawkish, at least that was what the market expected and we saw USD surged from there.
Equity markets were mixed today with European markets turned green while U.S was a mixed result.
Oil market was a downtrend today due to the significant strength of USD and expectation that tomorrow’s crude inventories will be a built up.
The market is currently very sentimental and that’s why you saw large movement every single day, USD regained strength today as mentioned, and tomorrow it might change, or it might continues. The truth is that we really don’t know as so many uncertainty is ahead of us.
ECB press conference tomorrow will be a main event to hear any hint for the direction of EUR.
Crude inventories will be another catalyst to further sell CAD as now the sentiment is really negative.
Yellen is again due to speak at NY session tomorrow.
And Chinese GDP tomorrow will also be another event to effect global economy and AUD & NZD.
Today was generally quiet since yesterday’s large movement of GBP.
As mentioned, GBP went through a typical ride of emotions, from excessive pessimistic to excessive optimistic.
Because of that, the London session employment datas of GBP did not actually provide too much action, both Average Earnings and Claimant Count Change were a beat, however, the price did not react and the reaction was muted.
Then we had the CPI number from USD which all came out as positive but not a deviation to drive the market.
Finally, BOC released its statement and kept the rate unchanged as expected, however, the surprise came in at the press conference when BOC Poloz mentioned that the rate cut possibility is on the table due to the uncertainty of U.S policy.
The market reacted by selling CAD.
It’s not only because of the possibility of rate cut, the context is that U.S has sent official letter to inform Canada of their intention to scarp NAFTA. Before today, all headline of trading war was between U.S and Mexico, so this is really the first time people realized that Canada might effected greatly if the free trade deal is gone. Because of that, the economy will take a shift to the downside, hence, the necessity of cutting interest rate is back on the table as previously, BOC has been stating their neutrality for the interest rate until 2018. That has certainty changed for now.
In the afternoon Yellen spoke at SF and the content was quiet hawkish, at least that was what the market expected and we saw USD surged from there.
Equity markets were mixed today with European markets turned green while U.S was a mixed result.
Oil market was a downtrend today due to the significant strength of USD and expectation that tomorrow’s crude inventories will be a built up.
The market is currently very sentimental and that’s why you saw large movement every single day, USD regained strength today as mentioned, and tomorrow it might change, or it might continues. The truth is that we really don’t know as so many uncertainty is ahead of us.
ECB press conference tomorrow will be a main event to hear any hint for the direction of EUR.
Crude inventories will be another catalyst to further sell CAD as now the sentiment is really negative.
Yellen is again due to speak at NY session tomorrow.
And Chinese GDP tomorrow will also be another event to effect global economy and AUD & NZD.