BackgroundIn a quiet week for hard economic data on both sides of the Atlantic, EURUSD has traded in line with movements in the US versus Germany 10-year bond spread. The gap in favour of the USD has narrowed from 230 to 190 basis points in recent weeks, taking EURUSD up with it. It will likely be…
Read morePosted by Matt Simpson | 25/05/2017 22:36 Volatility erupted across the energy sector as OPEC seemingly over promised yet underdelivered, sending WTI down by over 5% and dragging oil markets down with it. OPEC confirmed they would extend their oil production cuts by a further 9 months, which was at the lower bound of the…
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Latest EIA data recorded a 4.43mn barrel decline in inventories for the latest week. WTI traded higher this morning, hitting the highest level of 51.96, last seen on April 19. However, it was followed by a retracement after OPEC announced the existing output cut agreement to be extended for 9 months, as markets have largely…
Read morePosted by Naeem Aslam | 25/05/2017 12:34 The FOMC minutes delivered what investors were looking for. The Fed surely wants to avoid another taper tantrum and they kept the markets calm The Fed is letting sleeping dogs lie with the latest FOMC minutes confirming their current wait-and-see approach when it comes to reducing market liquidity.…
Read moreThe FOMC released its May meeting minutes last evening stating that the overall economic assessment was little changed. The Fed sees to raise rates once again is ‘soon be appropriate’. Markets assume that it signals a rate hike in June. The minutes also signals further tightening is expected if the incoming economic data shows improved…
Read morePosted by Matt Simpson | 25/05/2017 04:29 We highlight three correlations which show the near-term may provide further hikes, further out it may be less pleasant. - 2yrs suggest Fed will continue to hike - 2-10yr spread is out of sync with current hike path - If Fed Funds and 2-10yr spread are to meet,…
Read morePosted by Matt Simpson | 25/05/2017 03:00 Gold could be setting up for another leg higher whilst US Dollar Index decides if it will carve out a base or extend losses. WTI remains supported ahead of the OPEC meeting yet with expectations potentially priced in, then we’re on guard for a wake-up call. [embedded content]
Read morePosted by Matt Simpson | 25/05/2017 00:42 The Bank of Canada retained their neutral position overnight, which provided a further boost for CAD crosses alongside stronger oil prices and the slightly dovish FOC minutes. Summary of BoC May 2017 Statement BoC maintained its target for the overnight rate at 1/2 per cent Three measures of…
Read morePosted by Matt Simpson | 24/05/2017 22:36 Despite starting the session on a firmer foot, the US Dollar traded lower following the FOMC minutes and expectations for further hikes followed suit. The US Dollar faced further pressure overnight, particularly against commodity currencies as the Fed pinned a data rebound to the likelihood of the hike…
Read morePublished on 24.05.2017 20:48 The British pound is under further pressure today, falling for a third straight day after the terror attack in Manchester that left 22 people dead and scores more injured. At 4.45pm (GMT) the British currency was trading at $1.2940 against its US counterpart, down from $1.2962 in yesterday’s trading. Police in…
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