Currencies
- The euro (EUR) crashed yesterday to the lowest point in the last eight months at 1.3366 as the US GDP data came out better than expected at 4.0%, despite the bad US ADP Non-Farm Employment change. The single currency rebound towards 1.3395 after dovish Fed. Today the yearly European CPI Flash Estimate will be announced where it expected to be at 0.5%.
- The US dollar (USD) skyrocketed yesterday against the Japanese yen (JPY) while reaching a 3-month high at 103.08 after better US GDP. The greenback rose versus all 15 major currencies, consumer confidence improved and durable goods increased.
Equities
- Asian equities gained yesterday. The Japan 225 (NKI) advanced to 15762, the Hong Kong 40 (HSX) went to 24639, the China 50 (CNX) to 7259 and the India 50 (IND) to 7800.
Commodities
- WTI Crude (OIL) crashed yesterday towards 99.53 USD per barrel as gasoline stockpile rose and demand declined in the US.
Mover & Shaker with forex options
- The British Pound (GBP) fell yesterday against the US dollar (USD) as the US economy recovered faster than expected, speculating it will increase interest rates for first time since 2008.
- Option traders may consider constructing a Back Spread Strategy with Calls on the GBPUSD and gain if the pair moves higher, while the risk is limited to the premium paid.
- A Back Spread Strategy with Calls can be constructed by selling an at the money Calls while buying an out of the money Calls at double amount.
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Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.