NY Open: 'To vote or not to vote...'
FX Trader, Loonieviews.net
Summary: The greenback gained against the G10 majors, thanks in large part to the woes of sterling, which developed the attributes of a lead balloon as the Brexit crises became deeper still.
GBPUSD traded like the weight of the Brexit vote was on its shoulders. It was. Traders feared that Prime Minister Theresa May’s Brexit plan would be on the losing end of the parliamentary vote, scheduled for Tuesday. May feared likewise. She cancelled it. GBPUSD dropped from an opening level of 1.2715 to 1.2612 but bounced to 1.2635 by 14:00 GMT.
The drop in sterling since New York opened, contributed to US dollar gains against the G-10 majors. The Bureau of Labor Statistics said the JOLTS survey showed job openings were little changed at 7.1 million. EURUSD traded in a 1.1394-1.1420 range since the open but prices are unchanged as of 14:00 GMT. Traders are looking ahead to Wednesday’s US inflation data and Thursday’s European Central Bank meeting for direction.
USDCAD accelerated higher as WTI oil prices retraced the post-Opec production cut bump. The Canadian dollar is also suffering from concerns that the Bank of Canada is confused following last week’s dovish turn. Traders have already forgotten about the 94,000 new jobs reported in Friday’s stellar Canadian employment report.
Wall Street is in the red again. Increasing US/China trade tensions sparked by the Huawei CFO arrest, the retreat in oil prices and bad news for Apple (APPL: Nasdaq) is weighing on sentiment. AAPL is down 2.11% as of 14:00 GMT following reports that China banned the company from selling older phone models in the country. President Trump’s China tariffs got another result. GoPro (Gpro: Nasdaq) announced that it was moving all US-bound production out of China.
Latest Market Insights
Outrageous Predictions 2023: The War Economy
- The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)