Market Drivers August 15, 2019
AU Labor beats
UK Retail Sales beats
Nikkei -1.21%
Dax -0.63%
UST 10Y 1.56%
Oil $54/bbl
Gold $1517/oz
BTCUSD $9800

Europe and Asia:
AUD AU Labor 41.1 vs. 14.0 GBP
UK Retail Sales 3.3% vs. 2.6%

North America:
USD Retail Sales 8:30

There was a decidedly risk-on tone in global equity markets with USDJPY spiking nearly 90 pips in a matter of minutes at the start of London trade, but the pair gave up much of its gains in the morning dealing after China came out with harsh rhetoric in response to proposed additional 10% tariffs by US.

The global day started well on the data front with Australian employment beating consensus by a wide margin as jobs increased by 41K versus 14K. More importantly, fully 35k of jobs came from full-time employment indicating that growth remains robust despite headwinds from US-China tensions. However, the trend unemployment rate did rise which certainly provides RBA scope for further easing albeit at a 25bp pace. In any case, Aussie bounced slightly to .6785 on the news but gave up most of its gains on China headlines. Still given the generally robust fundamental background Aussie could be ripe for short covering if the risk tensions ease.

In UK Retail Sales data also beat the forecast coming in at 3.3% versus 2.6% as online sales spurred spending. UK data with generally stable employment picture, growing wages and robust consumer spending is performing far better than anyone could have imagined given the threat of a no-deal Brexit and if some sort of deal can be negotiated cable could quickly rise to 1.2500 or higher but with UK leadership intent on severing ties with EU political threats outweigh the economic data for now.

The tough rhetoric from China which noted that Trump broke the Osaka agreement and that the US would face retaliatory measures if 10% tariffs went into effect indicates that China is no longer willing to be conciliatory in its tone and that quickly dissipated any positive vibe the markets were feeling this morning. USDJPY was back to session lows at 105.80 and if markets take the new hardening tone as a sign of further trade war escalation the short will make an all-out assault on flash crash lows of 104.50. Still, with global economic data continuing to hold up and with central banks continuing to ease the economic background is far less dire than the price action seems to suggest. For now, however, politics drives all and FX continues to be headline-driven.

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent financial advisor if you have any doubts.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD trades around 1.1100 amid the Italian crisis, ahead of Fed minutes

EUR/USD is trading around 1.1100, in familiar ranges. Italian President Mattarella will explore if a new government can be formed after PM Conte resigned. The FOMC Minutes are eyed later in the day.

EUR/USD News

GBP/USD leans lower ahead of the Johnson-Merkel meeting

GBP/USD is trading below 1.2150, losing some ground. UK PM Johnson will meet German Chancellor Merkel in Berlin after the latter called for finding practical solutions on the Irish backstop.

GBP/USD News

USD/JPY: Bulls re-take 106.50 amid higher S&P futures, Treasury yields

Following a temporary reversal seen on Tuesday, the USD/JPY pair resumes the bullish momentum in Wednesday's Asian trading and regains the 106.50 level, tracking the gains in the US Treasury yields and S&P 500 futures. 

USD/JPY News

Top 3 Price Prediction Bitcoin, Ripple, Ethereum: Critical technical levels cryptos need to overcome after the summer slide

Late August is vacation time in the northern hemisphere – and cryptocurrency bulls may be at the beach as well. Tuesday's slide in prices lacks clear triggers and perhaps shows some fatigue or profit-taking.

Read more

Gold rebounds above $1,500, remains stuck in tight range

After closing the previous day at $1,506, the XAU/USD pair edged lower on Wednesday as the recovering market sentiment made it difficult for the precious metal to find demand as a safe-haven.

Gold News

Majors

Cryptocurrencies

Signatures