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The Daily Fix - 14/1/2016

Posted on: 14 January 2016, by: Pepperstone Support, category: Market Review

Risk posted another jukeout session as assets reversed early morning gains. S&P began the day strong before going on to print a new 2016 low at 1186.41, closing near 1890. US10Y yields finished the day at their lowest levels since OCT 2015.

Becoming a recurring theme where WTI leads the rout in risk assets failing to trade above 31.70 following the DOE inventory data and falling back towards the 30 level.  Brent traded below 30 for the first time since 2004. CAD was the worst performing currency globally as USDCAD printed fresh cycle highs near 1.4380.

Unlike the JPY, the CHF was not treated with safe haven status. EURCHF traded up to the top of the range, as traders now eye 1.1020 to the topside. SNB VP Fritz Zurbreugg noted that the franc is still considerably overvalued and the SNB stands ready to act. “Under certain conditions, however, the SNB is prepared to intervene directly in the foreign exchange market,” Zurbruegg said. “This applies especially in the prevailing environment.”

Cable continued to find no friends until finding familiar support from the multiyear trend line around 1.4350. The BOE will meet Thursday although no policy shift is expected. Latest ICM poll on the Brexit was released showing 44% vote to stay and 38% to leave.

Fedspeak and the Beige book did little to stem the risk selloff during the NY session.  Speakers continued to downplay the turmoil in Chinese markets, while the Beige book was compiled prior to the Chinese market chaos began.



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