USD at 5 Month Lows and Draghi Grinning Like a Cheshire Cat
The US Dollar hit its lowest price in 5 months overnight, as the market continued to price in even less chance that the Fed hikes in the near term.
I am a little surprised at this run, as I thought the risk was skewed greater to the upside in USD. With the Fed as wishy-washy as they are, I still think this could be too much, and setup for the mother of all USD rallies when they ‘surprise us’, but that’s well and truly putting the kart before the horse now, with markets pricing in just a 21% chance of a hike priced in for June and a 55% chance for 2016 at all.
Moving on, and last night’s notoriously unreliable ADP, the reading was basically in line with expectations and therefore didn’t get markets too excited.
For more information about USD data,check out our website.
NON-FARM Payrolls: Expectations and Scenarios
Hello April!
I sat down this morning thinking that I’d write some sort of April fool’s joke type piece saying that the Fed had raised rates in an ad-hoc meeting in a New York City bunker overnight, but I quickly decided against it to avoid being sued…
April Fool’s Day or not, today is also NFP Friday. The Fed rhetoric leading into tonight’s labour market print has maybe dampened the importance of this particular release a little bit, but it’s an NFP number nonetheless which means volatility and trader expectation.
With the tick over to the new month, the US Dollar actually experienced its worst quarter in more than five years. When you stop to think that this is actually a quarter following a rate hike, that strikes a chord with me. This is why throughout my writing, I try to express the importance of market expectations and where the greatest risk lies if these expectations are not met. The actual decision or data point itself is not as important.
For more information about NON-FARM data,check out our website.
The Monday After…
Ah yes, the Monday after… This is what we got out of NFP Friday:
“USD Average Hourly Earnings m/m (0.3% v 0.2% expected)”
“USD Non-Farm Employment Change (215K v 206K expected and 245K revised up previous)”
“USD Unemployment Rate (5.0% v 4.9%)”
So as you can see, 215,000 jobs were added in March with a healthy +3,000 February revision. Average hourly earnings also increased from 0.2% to 0.3%, but the unemployment rate crept up to 5.0% from the previous 4.9%. This number was blamed on more people being roped into looking for work within the faltering bigger picture.
The night was another mixed bag, with the headline print ‘not terrible’ which shows strength is still there. But the tick up in the unemployment rate can be viewed as a sign that the weak underlying economy is forcing people back into the job market when maybe they wouldn’t have to if things were more stable.
For more information about USD data,check out our website.
Eyes on the RBA: AUD/USD and AUD/JPY Levels
The eyes of the Forex world shift across to the local scene here in Australia today, with the latest RBA rates decision the highlight on the economic calendar.
While today’s decision isn’t expected to deliver a cut, looking at the guidance for next meeting is where the price action will come from.
If we remember back a couple of weeks ago in this morning blog, we spoke about Australian Prime Minister Turnbull throwing a spanner into the works of the AUD/USD trading machine:
“What to expect from Glenn Stevens and the Aussie Dollar changed dramatically yesterday, as Australian Prime Minister Malcolm Turnbull announced that parliament would be recalled early to try to push Australian Building and Construction Commission legislation through the senate ASAP.”
“If the bill doesn’t go through the senate then an early federal election will be called. A Federal election campaign that the RBA will surely at all costs avoid cutting rates in the midst of.”
What I didn’t speak about however, was that the next RBA rate decision in May actually falls on the day the Australian Federal Budget is released.
For more information about AUD data,check out our website.
USD/JPY Enters Beast Mode
The Japanese Yen hit it’s highest levels against the US Dollar in well over a year overnight. Something which obviously won’t be impressing the Bank of Japan and friend of Forex traders everywhere, Haruhiko Kuroda.
The man’s smile pose just works perfectly for the featured image on these articles, just look at the man. Oh wait, that’s not him!
Back to business and the runaway strength of the Yen. With the BoJ needing the weaker currency to boost stubbornly low inflation that just seems to be unmovable no matter what they do, this isn’t going down well. QE stimulus, even negative interest rates, just nothing is working for them and the constant comments that hit the newswires day after day have certainly lost their bang.
For more information about USD data,check out our website.
Like a Red Rag to USD Bulls
Sorry US Dollar bulls. Yesterday just wasn’t the day that it turns around for you. Yet…
The early morning Sydney time release of the FOMC Meeting Minutes has printed headlines galore around the ‘no hike in April’ theme, but that’s not to say it was a unanimous decision. Hikes were definitely discussed with the old data dependent line being whipped out once again:
“If the incoming economic data remained consistent with their expectations for moderate growth in output, further strengthening of the labor market, and inflation rising to 2% over the medium term.”
Read the full release from the FOMC here and excellent fundamental analysis from the WSJ’s Hilsenrath here (Hint: Copy paste headline into Google News).
For more information about USD data,check out our website.
Risk-Off and a USD/CAD Trading Scenario:
Yet another bout of risk aversion during yesterday’s trading session saw USD/JPY continue its downward spiral, as well as the S&P 500’s amazing bullish run back to swing highs come to a halt.
Risk…
For more information about USD data,check out our website.
[B]Jobs, Elections and Inflation Kick Off the Week[/B]
Non Farm Payrolls Friday night was the highlight of a packed last few days which have actually been full of talking points. Between NFP, elections in both Australia and Japan, a Chinese data dump AND don’t forget the ongoing Brexit shenanigans, are all having an impact on Forex and Indices markets throughout the tradingsphere.
Starting with NFP, and the number looks hottt!
“USD Non-Farm Employment Change: 287K v 175K expected”
…but as always, the number is just a single month’s headline beat. Nothing more, nothing less.
Plenty more on jobs, elections and inflation in the Vantage FX Daily Market Update!
[B]S&P 500 HITS RECORD HIGH![/B]
And just like that, we have new record highs on the S&P 500!
[B]BoJ Stimulus and Helicopter Money: USD/JPY Beware[/B]
We now have a majorly expectant market, running with an intra-day parabolic move to the upside, on what? Expectations, threats and rumours of an absolute last resort measure. Yikes.
Do you trust this USD/JPY rally?
[B]Markets Unmoved by Nice Attacks[/B]
A sad state of affairs on society reflected in markets not even batting an eyelid to another major terrorist attack. This is the new normal.
Check out the charts in today’s Forex Market Update.
[B]Turkish Military Coup Just a Minor Market Speed Bump[/B]
A military coup in a NATO member country, with hugely important geopolitical dimensions, positioned between the Middle East and Europe, sharing border with ISIS infected Syria should probably jolt markets, right? Wrong, this is 2016.
Stay safe, manage your risk and trade your levels. Enjoy the week!
[B]Aussie and Kiwi: Brothers in Focus[/B]
Monetary Policy Meeting Minutes from the RBA is today’s economic calendar highlight, with an expectantly dovish market hanging on the words of Governor Glenn Stevens.
At the last RBA meeting earlier this month, the bank left interest rates unchanged at 1.75% and expressed concerns about global economic growth and uncertainty following the still fresh Brexit vote. But while the Aussie has rallied on a no cut since the meeting, it hasn’t done any technical damage because everyone knows the cut is most likely to come in August.
Check out the Aussie and Kiwi charts.
[B]US in Focus: SP500 and the USDX[/B]
There are a plethora of analyst soundbites doing the rounds today, featuring the standard “stocks are at record highs because the chance of a US recession is no longer there, deflation is out the window and the labour market is still printing respectable numbers release after release throughout this period of uncertainty.”
Sure it’s such a convenient and simplistic way of looking at markets on a day to day basis, but it really is what it is.
Trade US Markets with Vantage FX.
[B]A Clear RBNZ Keeps NZD/USD Trading Technically[/B]
“Dear RBNZ,
As Forex traders, we thank you for your open, clearly communicated dovish monetary policy path. Nobody here likes unpredictability.
Now all that’s left to do is cut rates on August the 11th.
Regards and remember that the trend is your friend,
Forex Traders”
Are you finding the way NZD/USD steps between support/resistance to be clear?
[B]Draghi Unmoved[/B]
The European Central Bank overnight, kept interest rates on hold at zero as expected.
But with the whirlwind of uncertainty that surrounds a post-Brexit Eurozone including stubbornly low growth and a struggling Italian banking system, Draghi’s press conference was, as always a media gold mine, that kept markets hanging on his every word.
Do you see opportunities in EUR/USD and EUR/JPY?
[B]Majors at Key Levels Heading into a Packed Week[/B]
What a week we have ahead!
It’s FOMC/BoJ later, sure. But lets first not overlook the Australian second quarter inflation data released Tuesday during Asia:
Read our preview of this packed trading week!
[B]Rumours and Chit-Chat While we Wait[/B]
“All just day to day noise of financial media which you as Forex traders, need to be able to filter when making trading decisions.”
Get your dose of rumours and chit-chat while we wait for FOMC!
[B]ACTION! The Week Truly Begins with Australian CPI[/B]
If you’re only just settling down in front of your trading screens for the first time this week then you’ve timed yourself perfectly.
The charts from the Vantage FX Daily Market Update are playing out nicely.
[B]AUD/USD and USD/JPY: Has Central Bank Uncertainty Trashed the Trade?[/B]
The Federal Reserve has left interest rates unchanged and rhetoric rather bland in a fairly inconspicuous statement early this morning.
“USD Federal Funds Rate: <0.50% v <0.50% as expected"
Has Central Bank uncertainty trashed your trade setups?
