Posted on: 12 February 2016, by: Pepperstone Support, category: Market Review
Financial markets remain fragile with price action being buoyed by thin liquidity and cross asset trading. USDJPY traded to a low of 110.97. The start of the NY session was quite volatile as the pair approached 111.00 before reversing course and trading up to 113.27 in seconds. Not surprisingly, intervention was suspected as the cause but a lack of liquidity was most likely the culprit. Top of book market spreads throughout the morning session was about 65% wider than usual. Asakawa, vice minister for international affairs at Japan’s finance ministry, said that Japan is watching FX markets to see if moves are speculative. Earlier this week, Finance Minister Taro Aso also said that movements in the markets have been rough and that officials will continue to watch FX market movements closely.
EURUSD continues to trade with a safe haven bid testing 1.1380 with marked resistance just above at 1.1390. Above there could see a move back up to 1.1495.
WTI hit a new cycle low of $26.05, trading back up to a high of 27.48 coinciding with a WSJ tweet that suggested Opec was preparing for coordinated production cut.
S&P broke critical support in the 1812/20 zone but was able to recover on the Opec headlines that WTI didn’t even really believe. If this level goes the next major level is the 200w MA at 1790.
Global rates markets are heavily bid that even US curve prices in easing of 1bps for the year end.
Gold was heavily bid up to a high above 1260 from 1210, settling in in the 1240s