Posted on: 17 February 2016, by: Pepperstone Support, category: Market Review
It hasn’t happened in a little while but today we saw equities rally while oil sold off. Overnight Asian performance were cited as the reason for todays US equity gains while WTI fell back towards 29/28.70 bbl after the Saudi and Russian “output freeze” was near record levels. Iran “will not forgo its share of the market” as reiterated by Oil minister Bijan Zanganeh.
Inventory concerns continued to spur volatility. Genscape inventory report showed a 705k build in cushing for the week of Feb 12. API data will be delayed until Wed and DOE will follow on Thursday due to the US holiday.
LOWER UST yields pressure USDJPY down to 113.6. USDJPY was left lower even as yields recovered throughout the NY session closing the day around the 114.00 level.
It was a day of USD strength across the board as G10 commodity pairs and EM FX showed their sensitivity to declines in oil despite equity gains.
GBP was hammered over Brexit concerns trading back below 1.4300.
NZD saw another poor milk auction giving further support to RBNZ doves. The GDT index fell by 2.8% while whole milk powder prices fell by 3.7%.
Data did not seem to have much impact on the price action but should be noted:
German ZEW expectations index fell to 1 from 10.2 not surprising due to recent market turbulence.
UK CPI edged up to 0.3% YoY in January as expected, core CPI fell to 1.2% YoY vs 1.3% expected in line with consensus.
US NAHB housing index declined to 58 from 61 in February. US empire manufacturing index edged up to -16.64 in February up from a cycle low of -19.37 but still falling short of expectations of -10.
Looking ahead, Wednesday holds for us, US housing starts, PPI, industrial production and FOMC minutes. Also we will be getting UK employment data.