18 January 2017.Daily Market Update

Headlines:
Sterling had its biggest 1-day gain since 2008 in short squeeze following U.K. prime minister’s Brexit speech, while USD slumped after Trump said the dollar was too strong; Treasuries rose, with EGB squeeze higher contributing.
A WSJ article quoted President-Elect Trump as saying that the “USD was already ‘too strong’ in part because China holds down its currency, the Yuan”. He said that “our companies can’t compete with them now because our currency is too strong. And it’s killing us.”
May Sets Out Brexit Vision With Vow to Quit EU Single Market. U.K. PM for the first time said her govt is determined to make a clean break from the EU and said she would give Parliament a vote on the final Brexit deal
Oil Bosses in Davos See Shale Rebound Capping 2017 Price Surge. U.S. shale oil could limit price increases and spur greater volatility
result

MARKETS IN DETAIL

Fx
US Dollar saw losses across the board on Trump comments while pound rose in anticipation of May’s speech.
Pound surged as much as 3% past 1.2400 while Bloomberg dollar index was down ~1.2% to lowest since Dec. 14, with losses vs all G-10 peers
AUD this morning sits above 0.7560 continuing its march upward since yesterday afternoon.
The yen traded at 112.68 per dollar, up 1.4 percent. The currency has strengthened 3.7 percent over seven sessions.
Rate
Treasury Yields Touch 2017 Lows on Trump’s Dollar View. USTs held most of the gains that pushed yields to the lowest levels since at least December, after President-elect Donald Trump’s comment that the dollar is already too strong sent the greenback plunging.
The benchmark 10-year yield fell seven basis points to 2.32 percent at 4:24 p.m. in New York, according to Bloomberg Bond Trader data, near its 50-day moving average, which it hasn’t closed below since September. It touched 2.3036 percent, the lowest since Nov. 30, with the Bloomberg Dollar Spot Index headed for its biggest decline since July.
Treasuries led gains globally, with bonds advancing in a majority of the 25 developed markets tracked by Bloomberg.
Bund futures rallied amid position squaring as short positions and consensus steepener trades were squeezed
Equities
The S&P 500 Index slid 0.3 percent, led by financial and industrial companies.
The Stoxx Europe 600 index dropped 0.2 percent after clawing back losses of as much as 0.7 percent. FTSE 100 slid 1.5%
Commodities
Gold extended its winning streak to seven days, the longest since November.
Crude oil added 11 cents to $52.48 a barrel in New York.
Bloomberg’s commodity index rose for a fifth day.

 

Regards All.
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