[B]Daily Fundamental Dose: 17-June-2016[/B]
Hello Traders,
Thursday became the most volatile day of the week, as expected, not because of any action from major central bankers, including FOMC, BoJ, SNB & BoE, but because they stood pat with their current monetary policies. Even though, the FOMC, SNB and BoE were largely expected not to alter their monetary policy but the Bank of Japan disappointed markets without any change, which was expected to happen either in June or in July. The BoJ inaction fuelled the JPY across the board, which was also favored by Brexit concerns and were favorable to Gold as well. The USD, even after witnessing a soft-up to Core CPI and a positive Philadelphia Fed Manufacturing Index, could only gain a bit while the GBP and the EUR fluctuated between gains and losses as murder of a British lawmaker, Jo Cox, a fervent advocate of UK remaining in Europe, stopped Brexit campaign and also fueled expectations that the Bremain may now gain support. The AUD surprisingly left on its downside even after upbeat jobs report while the NZD remained a bit up. Moreover, the Crude prices didn’t rise for sixth consecutive day on expectations that this month supply will be higher after Canadian oil production will restore after wildfire.
On Friday, the markets reversed some of the JPY gains after Japanese Finance Minister Taro Aso escalated his concern about the surge in the yen to his counterparts in G7 and G20. The Japanese cabinet also said in its monthly economic report that the inflation is rising at a slower pace and provided additional damage to the JPY. The Crude gained for the first time in seven days as a halt in Brexit woes, coupled with weaker USD, helped the energy prices to rise.
Moving on, Canadian CPI and US housing market numbers are likely to govern today’s market moves. However, the market might respond to them with a slower pace after yesterday’s volatile day might have stopped-out many. Though, an upbeat housing market readings from US, which is more likely, can help the USD to pare some of its recent losses while CAD might adhere to advance further if the CPI registers welcome mark due to rise in Crude prices. Furthermore, overall market sentiment will turn towards the EU referendum polls and any announcement by the government, which already stopped campaigns for second consecutive-day, might give another shocking-day to the market players.
Have a nice-day and a great weekend……