[B]Mixed Markets, Wait and See:[/B]
The US Dollar pulled back into its weekly range against the majors as US data missed expectations and tomorrow’s FOMC meeting saw markets continue to settle and square up.
US data overnight included a 1.2% fall in Core Durable Goods orders for the previous month, as well as a drop in Consumer Confidence in October. CB Consumer Confidence is measured as an index based on surveyed households which was expected to stay steady around 102.5 but instead missed down at 97.6.
Read our Mixed Markets, Wait and See post in the Daily Market Update on the Vantage FX News Centre.
[B]Odds on a Melbourne Cup Rate Cut?:[/B]
While the eyes of the Australian public are on Melbourne for the ‘race that stops a nation’, the eyes of the financial world turn to Sydney for the interest rate decision out of the Reserve Bank of Australia.
Last month the RBA left the Cash Rate on hold but surprising with their dovish tone. The statement that accompanied the decision gave the Aussie some buying interest, pushing the pair back above weekly trend line support that we have been watching price chopping around, but overall respecting.
Read our Odds on an RBA Melbourne Cup Rate Cut post in the Daily Market Update on the Vantage FX News Centre.
[B]RBA Hawkish? Huh?:[/B]
Following the Reserve Bank of Australia’s decision to yesterday leave interest rates unchanged, the Aussie dollar doesn’t really know where it is at the moment. Hawkish, hawkish, hawkish. All I read is hawkish. But how is this line hawkish?
“Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.”
Is the RBA Hawkish? Read the blog in the Daily Market Update on the Vantage FX News Centre.
[B]Testify!:[/B]
Testifying on bank regulation before the House Financial Services Committee in Washington DC, Janet Yellen still managed to give markets some juicy monetary policy comments to sink their teeth into! While not delivering anything ground breakingly new, the fact that Yellen was able to reiterate the Fed’s stance that December was actually in play again is hugely significant.
Read more about Janet Yellen Testifying in the Daily Market Update on the Vantage FX News Centre.
[B]Thereof Dove:[/B]
The Bank of England overnight signalled that interest rates will not be lifted off record low levels any time soon. The Bank of England Monetary Policy Committee voted 1-0-8 (increase-decrease-hold) with Ian McCafferty the only dissenter.
Read more about Trading the Bank of England decision in the Daily Market Update on the Vantage FX News Centre.
[B]We’re Back On!:[/B]
Just some light Monday morning reading to ease you back into your trading week.
After Friday night’s NFP carnage, the majors have this morning opened with slight gaps down that they are quickly racing to fill. The following AUD/USD 5 minute chart shows the carnage and the open quite well:
Read more about How to Trade the Fed in the Daily Market Update on the Vantage FX News Centre.
[B]Week of the Acronym; Yuan and Retail:[/B]
Welcome back to your trading desks after markets long weekend. The calendar will tick over to December tomorrow, meaning the erratic run into Christmas is now upon us. But first, we have a HUGE week of data releases and central bank action which will see no serious traders going anywhere for the time being.
RBA, AUD GDP, NPF, ECB, ABCDEFGHIJKLMNOP! It certainly is the week of the acronym and with just about every big player or release coming up, you can see where today’s featured image comes from!
Read more about How to Trade the Forex Week Ahead on the Vantage FX News Centre.
[B]Build up to the RBA:[/B]
December the 1st? Wow, somebody tell me where 2015 went?!
With today also the 1st Tuesday of the month, the Reserve Bank of Australia meet today for what is expected to be a fairly uneventful release. After last week’s comments about chilling out (God I love the RBA), the market has all but priced out any chance of another cut before Santa drops down our chimneys.
Read more about how to trade the RBA decision on the Vantage FX News Centre.
[B]Data Dependant? ISM Back to Recession Territory:[/B]
With Glenn Stevens and the RBA chilling out into Christmas, the big overnight storyline was the slumping US manufacturing sector.
“USD ISM Manufacturing PMI (48.6 v 50.6 expected)”
How does ISM Back to Recession Territory affect the Fed? Read more in the Daily Market Update on the Vantage FX News Centre.
[B]ECB Today; Beware of the Crowded Trade:[/B]
It’s not a question of if, but rather by how much Draghi and the European Central Bank will increase its stimulus program tonight. Still fighting off the lingering effects of deflation on the stuttering European economy, Draghi has pledged to do whatever it takes to give the economy the kickstart required.
“Whatever it takes!”
Are you aware of the crowded EUR/USD trade? Read more in the Daily Market Update on the Vantage FX News Centre.
[B]Mario Draghi, was that Doing Whatever it Takes?:[/B]
Mario Draghi and the European Central Bank rocked markets to the core overnight, with cuts and stimulus that nowhere near met market expectations.
By reducing its deposit rate by only 0.1% to -0.3% (the market wanted -0.4% to -0.5%) and signalling that it would extend its QE stimulus program into March 2017 (the market didn’t even expect a hard date cap) at a current rate of €60 billion a month (again, €75 billion + spoken about), saying expectations were missed is certainly an understatement!
Are you trading the ECB fallout? Read more in the Daily Market Update on the Vantage FX News Centre.
[B]Up Periscope!:[/B]
With Friday’s US labour report coming in largely within expectations following Thursday’s Draghi induced carnage, the market felt it didn’t need to massively re-rate for a second day in a row. A largely uneventful set of accompanying numbers being the unemployment rate steady at 5.0% and the average hourly earnings at 0.2%, both as expected saw the majors barely blip.
“USD Non-Farm Employment Change (211K v 201K expected and 298K previously)”
How to trade NFP aftermath. Read more in the Daily Market Update on the Vantage FX News Centre
[B]Oil Seeps Lower; CAD Spurts Higher:[/B]
Oil prices seeped to their lowest level in over 6 years, breaking swing lows as oversupply was confirmed as not being abated any time soon. OPEC meetings ended with no resolution on production cuts and lacked any reference to output ceilings which was the big kicker in sending Oil to new lows.
As Oil Seeps Lower and CAD Spurts Higher, read more in the Daily Market Update on the Vantage FX News Centre.
[B]Unconventional Policies and the CAD:[/B]
While Speaking at the Empire Club of Canada in Toronto, Bank of Canada Governor Poloz delivered the alternate idea that BOC policymakers still have the fire-power to spur growth even with interest rates currently at near zero levels.
Are you trading the BOC’s Unconventional Policies and the CAD? Read more in the Daily Market Update on the Vantage FX News Centre.
[B]Central Banks in Abundance:[/B]
“NZD Official Cash Rate (Cut from 2.75% to 2.50% as expected)”
So with the Kiwi rallying, we again see the phenomenon we seem to now be calling a ‘hawkish rate cut’. With the RBNZ ‘expecting to reach inflation goals at current rate settings’, the market has interpreted Wheeler as not looking to lower rates again any time soon and duly obliged with a rally.
With releases via Central Banks in Abundance, read more in the Daily Market Update on the Vantage FX News Centre.
[B]Australian Employment Data Wrong? What Matters to Traders:[/B]
Yesterday’s Employment figures out of Australia were what can only be described as marvellous! …if taken on face value that is. As Peter Martin of the SMH hilariously pointed out, our stubborn Minister for Employment had no problems doing.
“The minister was asked whether she had concerns about the reliability of the figures. She said she did not.”
See how to Trade the Australian Employment Data in the Daily Market Update on the Vantage FX News Centre.
[B]FOMC and Trader Expectations:[/B]
And here we are, FINALLY the Monday before the December FOMC meeting. The week before Christmas: the traders version. The biggest, most anticipated meeting (really this time) since… well the last time the Fed raised back in June 2006. As widely expected, we are likely to see a 0.25% hike in the short term interest rate, lifting rates off the current near zero levels.
Think about Trader Expectations into FOMC. Read more in the Daily Market Update on the Vantage FX News Centre.
[B]FOMC Lead Up: The Sounds of Silence:[/B]
Can you hear that? That is the sound of silence, with quiet market action expected as we lead into Thursday morning’s FOMC decision. All I can say is enjoy the peace while it lasts!
With only 2 and a bit more days left before the Fed finally pushes the button on an interest rate liftoff, any strong directional moves in the US Dollar seem to have already been played out. Barring any market thinning as traders uninterested in a volatility play in the last calendar month of the year take their money to the sidelines, the squeeze has played out and we are going to head into FOMC with value in a move either way pending just how hawkish Yellen sounds.
Are you trading the FOMC Lead Up? Read more in the Daily Market Update on the Vantage FX News Centre.
[B]Forget Conventional Economics, You’re a Trader Now:[/B]
I don’t want to rain on anyone’s parade, but tomorrow’s FOMC meeting is most probably going to be the least volatile, biggest non-event of all time. I mean lets be honest, markets and traders have been speaking about, and planning for this Christmas present for what, 5 years now?
Are you trading FOMC? Read more in the Daily Market Update on the Vantage FX News Centre.
[B]Fed Hikes Interest Rates; Dovish Hike:[/B]
“FOMC hikes interest rates by 25bps to 0.25%-0.50% as expected.”
The US Federal Reserve has this morning raised interest rates for the first time in almost 10 years. With the move was widely expected by economists and market participants alike, all interested eyes were focused on the pace of subsequent rate increases now that a new cycle had begun.
The Fed Hikes Interest Rates. Read more in the Daily Market Update on the Vantage FX News Centre.