Posted on: 29 January 2016, by: Pepperstone Support, category: Market Review
Lower USD going into Asia’s Friday open mainly because of soft US data and short covering in oil markets. WTI traded up testing 35.00 bbls and settling in at 33.50. Reason cited for the rally is speculation over an OPEC production cut but positioning may be more to blame behind the scenes.
WTI spiked over 33 in early NY trading on claims from the Russian Energy Minister that Saudis proposed a coordinated production cut of 5% for Opec members.
About 90 minutes later an unnamed Gulf Opec delegate said there were “no Saudi proposal whatsoever.” Saudis remained quiet providing no comment whatsoever on the matter.
US economic data printed two large disappointments. Pending home sales rose by 0.1% MoM in December vs an expected rise of 0.9%. Revisions also showed a negative revision of -0.2% to -1.1%YoY. Pending home sales rose 3.1% vs 4.8% expected. Reason cited was a misalignment between buyers and the price of homes for sale. US durable goods came out much lower than expected in December. The reading fell by -5.1% vs -0.7% expected for the headline number while the core fell -1.2% vs -0.1%.
London session was relatively quiet. German regional CPIS showed some positive surprise for national inflation. CPI met estimates for January. Down by -0.8%MoM as expected on headline. Core inflation was 0.1% firmer than expected showing a gain from 0.3% to 0.5%.
EZ Economic Sentiment index came out worse than expected leaving the index at its lowest level since Aug 2015.
UK Q4 GDP came in as expected at 0.5% QoQ and 1.9% YoY with the YoY print being the lowest since Q1 2013.
USDJPY was relatively unchanged on the session ahead of Fridays morning data and the BOJ rate decision.