Market wrap: risk-averse mood lingered - Westpac

Ross J Burland FXStreet

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: The risk-averse mood lingered, nudging equities lower (S&P500 -0.4%). Metal prices fell, as did long-term US bond yields slightly, while the US dollar is little changed.

Interest rates: US 10yr treasury yields were volatile, making a round trip from 2.36% to 2.32% and back, but currently at 2.34%. A decent set of CPI and retail sales data failed to boost longer-term yields, although the 2yr did remain elevated at 1.70% - a nine-year high. Fed fund futures yields continued to price the chance of a December rate hike at almost 100%.

Currencies: The US dollar index is unchanged on the day. EUR made a round-trip from 1.1790 to 1.1861 and back. The safe-haven yen outperformed, USD/JPY dipped from 113.20 to 112.48 (a one-month low) but later retraced. Underperformer AUD stabilised after the wage data disappointment but did nudge down to a fresh five-month low of 0.7573. NZD had a brief bounce to 0.6920 but is unchanged on the day at 0.6875. AUD/NZD extended lower to 1.0989 – a one-month low – mainly fallout from the wage data disappointment but possibly assisted by iron ore’s 2.1% fall yesterday.

Economic Wrap

US CPI rose 0.1% in Oct (as expected), for an annual pace of 2.0%. The core measure rose at an annual pace of 1.8% (vs 1.7% expected) after a positive revision, with housing and medical costs both a touch stronger in the month. Retail sales rose 0.2% in Oct (vs 0.0% expected). The core control group at 0.3%, matched estimates, but a +0.1ppt revision to the prior month to 0.5% makes for a stronger reading on the consumer. The gains appeared broad-based, with 10 of 13 headline categories posting monthly increases."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD off highs, back to 1.1850

EUR/USD loses some upside momentum, returning to the 1.1850 region amid humble losses. The pair’s slight decline comes against the backdrop of a marginal advance in the US Dollar as investors continue to assess the latest US CPI readings.

GBP/USD advances to daily tops around 1.3650

GBP/USD now manages to pick up extra pace, clinching daily highs around 1.3650 and leaving behind three consecutive daily pullbacks on Friday. Cable’s improved sentiment comes on the back of the inconclusive price action of the Greenback, while recent hawkish comments from the BoE’s Pill also collaborates with the uptick.

Gold surpasses $5,000/oz, daily highs

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The yellow metal’s upside is also propped up by the lack of clear direction around the US Dollar post-US CPI release.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.