Market Drivers September 13, 2016
Commodollars seesaw
UK CPI slightly cooler
Nikkei 0.34% Dax 0.06%
Oil $45/bbl
Gold $1333/oz.
Europe and Asia:
CNY IP 6.3% vs. 6.2%
CNY Retail Sales 10.6% vs. 10.2%
GBP UK CPI 0.6% vs. 0.7%
EUR GE Zew 0.5 vs. 2.8
North America
No Data
It's been another night of seesaw trade with most of the majors tracing our narrow ranges amidst little fresh newsflow and generally subdued risk appetite.
The commodity dollars saw some selling pressure in late Asian dealing despite better than expected data out of China. But both Aussie and kiwi stabilized by London open as bid appeared ahead of the .7500 and .7300 levels respectively.
In China both the Industrial Production and Retail Sales data came in better than expected at 6.3% vs. 6.1% eyed and 10.6% versus 10.2% forecast. However, although recent data out of China shows stabilization on the back of government spending and consumer demand, private investment remain weak and many analysts fear that growth may slow below 6% as government curbs property values going forward.
The Aussie initially popped higher on the news, but gave up its gains almost instantly and drifted lower until buyer came in at .7500 level. The unit is likely to remain in a tight range until tomorrow's AU employment report which promises to be the marquee release of the week.
Meanwhile in Europe UK CPI data was a bit cooler than expected at 0.6% versus 0.7% eyed. According to the ONS "The rate is still relatively low in the historic context although it is above the rates experienced in 2015 and early 2016. The main upward contributors to change in the rate were rising food prices and air fares, and a smaller fall in the price of motor fuels than a year ago.These upward pressures were offset by falls in hotel accommodation prices, in addition to smaller rises in the prices of alcohol, and clothing and footwear than a year ago."
Cable drifted a bit lower on the news dropping below the 1.3300 level as the expected inflation from UK has failed to materialize. The pair is likely to base at the 1.3250 level for the rest of the day as markets await UK labor data tomorrow which will give traders a much better feel of the post-Brexit state of health of the economy.
In Europe the German ZEW came in at 0.5 versus 2.8, but euro saw little impact from the news. With no US data on the docket today, the North American session could mirror the seesaw action of the start of the day as most of the major FX pair continue to tread water around the current levels.
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Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.
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