FX sidelined due to data drought
FX Trader, Loonieviews.net
The canines are barking already and the dog days of summer are still a month away. FX traders are mulling over the G-20 statement. They expressed concern about trade tensions and reaffirmed their commitment to avoid competitive currency devaluations. Nothing new there, except traders are still a tad leery after Trump’s comments on Friday, complaining about weak currencies taking advantage of the US.
Wall Street opened with small losses because of negative trade chatter. Tech stocks are a tad lower while energy stocks are a bit higher. Weaker than expected US existing home sales (actual -0.6% vs forecast 0.5%, m/m) won’t help sentiment.
EURUSD opened just above the overnight low of 1.1688, traded to 1.1725 and is now hovering just above 1.1700. Traders are cautious ahead of Thursday’s European Central Bank meeting. EURUSD is in a minor uptrend above 1.1680, looking for a break above 1.1760 to extend gains to 1.1850. A break below 1.1680 suggests further losses to 1.1610.
USDJPY has bounced off support at 1110.75 and is trading at 111.30. US 10-year Treasury yields are up 1.02% to 2.923%, which has served to offset Bank of Japan easing concerns. USDJPY is in an uptrend while prices are 110.40. However, a break above 111.50 is needed to shift the focus from the downside to 112.00.
The Organization for Economic Cooperation and Development had some advice for Canada. They suggested Canada lower corporate taxes to offset trade risks. FX markets ignored the advice. USDCAD continued to consolidate Friday’s gains, trading in a 1.3116-1.3159 range.
WTI oil prices have held on to European gains and are trading at $68.83/barrel. The price boost is courtesy of President Trump who tweeted another threat to Iran. He appeared serious because the tweet was all uppercase.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.