NY Open: January deep-freeze seizes the dollar
FX Trader, Loonieviews.net
Summary: Wall Street bulls are focused on Facebook, but a poor Chicago PMI print as well as further confusion on the Sino-US trade talks loom in the background.
“China’s top trade negotiators are in the U.S. meeting with our representatives. Meetings are going well with good intent and spirit on both sides. China does not want an increase in Tariffs and feels they will do much better if they make a deal. They are correct. I will be..."
"...meeting with their top leaders and representatives today in the Oval Office. No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long-standing and more difficult points. Very comprehensive transaction..."
"...China’s representatives and I are trying to do a complete deal, leaving NOTHING unresolved on the table. All of the many problems are being discussed and will be hopefully resolved. Tariffs on China increase to 25% on March 1st, so all working hard to complete by that date!”
The FX reaction to Trump’s tweets has been subdued, in part because markets are becoming inured to his hyperbole. Only AUD, NZD and JPY have managed to inch higher since the New York opened while the rest of the G-0 majors are close to flat. The USDX is just above the uptrend line from May, which if broken, suggests further US dollar weakness ahead.
Canada November GDP was -0.1%, as forecast, with some of the weakness being blamed on a postal strike. USDCAD consolidated yesterday's losses in a 1.3135-1.3165 range, and the short-term outlook is negative due to bearish technicals, a dovish Fed and rising crude oil prices. However, there is a lot of support in the 1.3120 area.
Chicago PMI dropped to 56.7 in January, well below December’s 65.4 result. Weekly jobless claims were higher than forecast (253,000 versus a forecasted 215,000), and the employment cost index dipped to 0.7% from 0.8%.
Wall Street didn’t appear too perturbed about the economic data, preferring to focus on yesterday’s blow-out results from Facebook (FB: Nasdaq) which surged 11.7% as of 14:00 GMT. However, the Dow Jones Industrial Average is in the red.
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.
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