Market Drivers May 22, 2015
EZ IFO 108.5 vs. 108.3
Draghi - ECB not constrained by zero bound
Nikkei 0.30% Europe -0.28%
Oil $60/bbl
Gold $1211/oz.
Europe and Asia:
CNY LEI 1.1% vs. 0.5%
EUR IFO 108.5 vs. 108.3
GBP PSNB 6B vs. 7B
North America:
USD CPI 8:30
CAD CPI 8:30
CAD Retail Sales 8:30
It's been a quiet Friday night in the currency market with most major pairs stuck in very narrow ranges as traders wound up their positions at the end of the week.
The euro was slightly higher in the wake of better than expected Ifo data which came in at 108.5 versus 108.2 eyed. The current assessment situation was at 114.3 versus 114 prior but expectations were a tad lower at 103 versus 103.40 the month before.
Overall German businesses were more sober in their expectations of growth prospects, but IFO stuck with its forecast of 0.5% GDP. The latest Flash PMI data however showed a slowdown in both German Manufacturing and Services sectors so it remains to be seen whether this sanguine sentiment will last, but for now traders took the news in stride and pushed the EUR/USD through the 1.1175 level.
At a forum on central banking Mario Draghi noted that the economic outlook for the region is brighter than it has been in seven years and that inflation expectations have recovered from the trough. He also reaffirmed the position staked out earlier in the week by Benoit Coeure that the ECB was not constrained by zero bound, but his comments had no impact on price, as the statement was clearly theoretical rather prescription for immediate policy practice.
The EUR/USD which has corrected significantly over this week is likely to consolidate and trade off anti-dollar flows for the rest of the day. If US CPI data prints cooler than expected the pair could pop above the 1.1200 figure once again as traders bet that any Fed action will be delayed. Inflation expectations are likely to be key in any FOMC deliberations and if the CPI remains near the 0.0% level the committee will be hard pressed to move on rates under such conditions. Indeed Chicago Fed President Charles Evans remarked this week that rates should not be normalized until 2016 given the low inflation readings at the present time. Therefore the CPI data today could have some impact on the market as close up trading for the week.
EZ IFO 108.5 vs. 108.3
Draghi - ECB not constrained by zero bound
Nikkei 0.30% Europe -0.28%
Oil $60/bbl
Gold $1211/oz.
Europe and Asia:
CNY LEI 1.1% vs. 0.5%
EUR IFO 108.5 vs. 108.3
GBP PSNB 6B vs. 7B
North America:
USD CPI 8:30
CAD CPI 8:30
CAD Retail Sales 8:30
It's been a quiet Friday night in the currency market with most major pairs stuck in very narrow ranges as traders wound up their positions at the end of the week.
The euro was slightly higher in the wake of better than expected Ifo data which came in at 108.5 versus 108.2 eyed. The current assessment situation was at 114.3 versus 114 prior but expectations were a tad lower at 103 versus 103.40 the month before.
Overall German businesses were more sober in their expectations of growth prospects, but IFO stuck with its forecast of 0.5% GDP. The latest Flash PMI data however showed a slowdown in both German Manufacturing and Services sectors so it remains to be seen whether this sanguine sentiment will last, but for now traders took the news in stride and pushed the EUR/USD through the 1.1175 level.
At a forum on central banking Mario Draghi noted that the economic outlook for the region is brighter than it has been in seven years and that inflation expectations have recovered from the trough. He also reaffirmed the position staked out earlier in the week by Benoit Coeure that the ECB was not constrained by zero bound, but his comments had no impact on price, as the statement was clearly theoretical rather prescription for immediate policy practice.
The EUR/USD which has corrected significantly over this week is likely to consolidate and trade off anti-dollar flows for the rest of the day. If US CPI data prints cooler than expected the pair could pop above the 1.1200 figure once again as traders bet that any Fed action will be delayed. Inflation expectations are likely to be key in any FOMC deliberations and if the CPI remains near the 0.0% level the committee will be hard pressed to move on rates under such conditions. Indeed Chicago Fed President Charles Evans remarked this week that rates should not be normalized until 2016 given the low inflation readings at the present time. Therefore the CPI data today could have some impact on the market as close up trading for the week.
Recommended Content
Editors’ Picks
EUR/USD holds steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?
Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.