The NY session began with an overall risk off tone but managed to reverse as trading wore on. Better earnings from a prominent US bank were deemed short of recently bloated expectations and the details of the US retail sales report were weak. Control retail sales sank -0.1% in June and this is the number that goes into the personal consumption segment of the GDP report. This put downside risk to 2Q GDP forecasts and ''risk'' was promptly sold. Financials eventually led the market higher as earnings for other banks were upgraded. We'll have to see what happens later this week as more top institutions are slated to report. By the time the dust settled on stock trading, the S&P was sitting about 0.5% higher on the day.
The FX space traded pretty well in tandem with risk. EUR/JPY initially knifed down to a 129.36 low before recovering into the 130.95 highs ahead of the close. USD/JPY meanwhile found support at 92.72 before staging a massive comeback into the 93.78 highs. This left EUR/USD in limbo. The pair opened smartly above 1.40 but only recovered modestly off the 1.3913 session lows as the price action in the yen crosses dominated. USD/CAD was a huge mover and managed to dip by more than 1% for the second consecutive day, sitting by the 1.1328 lows after a 1.1445 NY open. Improved home prices in Canada and carry-over from the more upbeat loan officer survey seemingly drove the move here. The last time the pair declined by so much in two days, it jumped nearly 1% the following day – something to keep in mind here.
Upcoming Economic Data Releases (Asia Session) prior expected
- 7/15 1:00 GMT AU Westpac Leading Index (MoM) MAY 0.70% - -
- 7/15 JN BOJ Target Rate 15-Jul 0.10% 0.10%
